Education: Chevening and Commonwealth Scholarships

Baroness Warwick of Undercliffe: asked Her Majesty's Government:
	Whether they will reconsider the funding cuts for Chevening and Commonwealth scholarships to be made in 2009.

Lord Malloch-Brown: My Lords, we obviously face hard budgetary choices, not least to find resources for new priorities such as climate security. We have consolidated our scholarship programmes and are focusing on the Chevening and Marshall schemes. While the FCO's support to Commonwealth scholarships is ending, the Government's overall contribution is increasing through funding from the Department for International Development.

Baroness Warwick of Undercliffe: My Lords, I thank the Minister for his reply. I also declare an interest as chief executive of Universities UK. How does he reconcile the cuts made by his department with the Prime Minister's initiative, which is intended to enhance higher education globally and not just in certain countries? In taking that decision, did his department make any assessment of the impact of these cuts on the competitiveness and reputation of British higher education?

Lord Malloch-Brown: My Lords, my noble friend speaks to a subject with which I think all in this House are deeply sympathetic. I am sure that many of us benefited from scholarships of these kinds. Certainly I was lucky enough to go to the United States on such a scholarship. There is a growing number of sources of such scholarships both from the British Government but more generally from foundations and others, and we felt it important to consolidate the programme at this point and to focus on countries that are not so well imbued with such opportunities and where the prospect of bringing students from those countries to the UK would contribute to strategic relationships in the long term. I mean countries such as China and Brazil.

Lord Howell of Guildford: My Lords, the Minister is putting up a brave defence. As I understand it, the Chevening scholarships are not affected by the announcement on 13 March that there would be cuts. At any rate, they do not have the Commonwealth as their priority, but the FCO scholarships did, and it seems absolutely crazy at a time when we are trying to establish strong links with the fast-growing, high-tech counties, many of which are in the Commonwealth and in rising Asia, that we should be cutting our scholarship arrangements with them. If the United States took that view, the Minister would not have been awarded a scholarship to go there because it would have said, "Oh, Britain's a developed country and it doesn't count any more". Could we please rethink a system that will work very badly against this country's interests?

Lord Malloch-Brown: My Lords, let me reassure the noble Lord that the funding for Commonwealth scholarships will not in fact decrease, but increase slightly because DfID funding is being substituted for FCO funding. It will, however, be targeted more at developing countries. Until now, 90-plus per cent of the funding went to the old Commonwealth countries whereas the DfID funding will be aimed at new ones. Therefore, while there will be losses in countries such as Canada and Australia, we will be targeting those Commonwealth countries where the need is the greatest.

Baroness Finlay of Llandaff: My Lords, will the Minister confirm that funding will be transferred for medical courses? I declare an interest as it costs less than £9,000 to educate a specialist in palliative medicine or in dermatology using distance learning and supervision. In many cases, they have been the only specialist in their country following education from the UK.

Lord Malloch-Brown: My Lords, I may need to get back to the noble Baroness with more detail on that. However, supporting training of that kind is a DfID priority in its public health programme.

Lord Wallace of Saltaire: My Lords, we on these Benches appreciate the Foreign Office's delicacies in a relationship in which DfID's funding is increasing rapidly and the FCO's funding is being held down. We understand that the previous Chancellor of the Exchequer did not like the Foreign Office and that that is part of the shift. However, we have important political relationships with a number of other developed countries in the EU in what we have to call the developed Commonwealth. The small political investment required for those seems to be worth while and in the national interest in building relationships with future political, economic and social elites in those countries. Will the Minister encourage his Secretary of State gently to remind the now Prime Minister that these matters are politically important?

Lord Malloch-Brown: My Lords, I do not know about the former Chancellor but I know that the now Prime Minister strongly supports the Foreign Office. We all recognise that the relations that these programmes have given us with countries such as Canada and Australia are critical and we need to find ways to make sure that scholars go back and forth between them. However, I am not sure that a Foreign Office programme, whose strategic purpose is not links in general but targeting countries with which we do not enjoy such historical relationships, is necessarily the vehicle for that.

Lord Judd: My Lords—

Lord Hannay of Chiswick: My Lords—

Baroness Ashton of Upholland: My Lords, I think that the noble Lord, Lord Hannay, stood up earlier than my noble friend Lord Judd. However, if we are quick, we can get both in.

Lord Hannay of Chiswick: My Lords, the noble Lord spoke about Marshall scholarships in his first reply and gave the impression that all was fine as far as they were concerned. However, will he confirm that the FCO funded 40 Marshall scholarships in 2006, is offering to fund only 31 in 2008 and, on present assumptions, that the figure will drop to 28 by 2010? Is it not shameful to repay the single most generous act in this country's diplomatic history by such penny-pinching economies?

Lord Malloch-Brown: My Lords, the noble Lord will be relieved that my right honourable friend the Foreign Secretary committed to not reducing the moneys available for Marshall scholarships in this coming budgetary period. However, the increased cost of providing them due to the increase in tuition and other fees in the US means that the same money will buy slightly fewer scholars. However, the numbers are coming down from around 43 to 38 and, therefore, it is not the rapid descent that the noble Lord described.

Lord Judd: My Lords, I must again declare an interest as an honorary officer of the Council for Education in the Commonwealth. Does my noble friend agree that, whatever the Government's intentions, this will enhance scepticism in many quarters about real political commitment to the Commonwealth? Does he further agree that, if the Commonwealth is not to be anything but a hollow and expensive edifice, it is essential that in its declared commitments to human rights, democracy, the rule of law, good governance and to being a world leader in this respect, the interchange of education at the university level is an absolutely essential priority?

Lord Malloch-Brown: My Lords, again, I reassure my noble friend that we are not cutting Commonwealth scholarship funding. DfID moneys mean that the budget will increase, not shrink. I acknowledge that this is leading to a deployment of scholarships away from old Commonwealth to new Commonwealth countries in the hope that other sources of funding will be available to make up the difference. I completely agree that scholarships of this kind are not only a critical part of this country's future in a global world but critical for students everywhere.

Questions for Written Answer

Baroness Miller of Chilthorne Domer: asked Her Majesty's Government:
	Whether they evaluate the quality of Written Answers in the House of Lords; and whether they have established any variation in quality between departments.

Baroness Ashton of Upholland: My Lords, under the terms of the Ministerial Code, Ministers are directly accountable to Parliament for the accuracy and relevance of their Answers to Parliamentary Questions. Ministers take their duties to Parliament seriously and ensure as much as possible that Answers are informative, helpful and timely. To try to evaluate the quality of Answers across departments would cut across that direct accountability of Ministers to Parliament.

Baroness Miller of Chilthorne Domer: My Lords, I thank the Lord President for her reply. I know that she is aware of the importance of this matter, so will she undertake to evaluate the different departments to ensure that my recent experience, particularly with the Home Office, is not repeated? You get three kinds of Answers: first, "We do not know but we will not say that"; secondly, "We will not tell you, so we will give you some policy waffle instead"; and, thirdly, in regard to timeliness—and the noble Baroness will have seen on the Order Paper my Question from 5 March, which was eminently answerable—"We will not tell you for such a long time that the Answer will be irrelevant". Does she accept that this prevents the Opposition from undertaking their perfectly reasonable scrutiny role?

Baroness Ashton of Upholland: My Lords, if that has been the experience of the noble Baroness, I must apologise on behalf of the Home Office. One of the functions that I have undertaken—as indeed did my predecessors—is to try to ensure that Answers are given within the correct timetable. I do not always succeed, but I certainly try. If the noble Baroness and any other Member of your Lordships' House bring me examples, I will be more than happy to pursue particular Answers directly. I completely agree with the noble Baroness that it is not acceptable if Answers are not given as fully as possible.

The Countess of Mar: My Lords, the noble Baroness knows of the difficulties that I have had getting Answers from the Department for Environment, Food and Rural Affairs and the Environment Agency Wales. How can I get through to them that giving a non-answer is not an Answer? I will keep asking Questions, regardless of the cost to the taxpayer, because if they do not give me the truth—and I know what the truth is because I do not ask Questions without knowing the truth beforehand—they will eventually be found out. As my granny used to say, "Be sure your sins will find you out".

Baroness Ashton of Upholland: My Lords, noble friends behind me are asking whether it is the best use of taxpayers' money to ask Questions to which one already knows the answer. I know of the particular case to which the noble Countess refers and we have tried to deal with it. I reiterate that this is the responsibility of Ministers. As noble Lords will know, the noble Lord, Lord Jopling, has been assiduous over the years in examining this matter. He did me the honour of attending a Front-Bench meeting and making the point clearly that it is the role of your Lordships to hold the Government to account via Questions, debates and so on. My colleagues were keen to hear from the noble Lord, Lord Jopling, who put the case very well. If there are issues that noble Lords wish to raise with me, I shall be happy to take them up.

Lord Maclennan of Rogart: My Lords, does the Leader of the House recognise that, in the previous Session of Parliament, 4,107 Questions out of 5,702 Questions tabled took longer than the 14-day deadline to answer and that, at the end of the Session, 25 Questions were unanswered? These facts have already been revealed. What do the Government propose to do to deal with this untimeliness of Answers?

Baroness Ashton of Upholland: My Lords, I have sought to deal with it within my private office by making sure that, when the Answer to a Question is overdue, the department and the Minister are notified. Noble Lords who have been in departments will know that a process has to be gone through, which relies on civil servants, and often other Ministers who are not in your Lordships' House, to clear and deal with policy Questions. As noble Lords will know, sometimes Questions are complicated. In the 1996-97 Session, there was a total of 1,247 Questions. That figure has now risen to 5,702 Questions, so there is also the issue that we have to deal with many more Questions. That is a good thing—it is a sign of a healthy House of Lords in operation—but it puts on pressure. It is no excuse, but I wanted to mention that in passing.

Lord Campbell-Savours: My Lords, is there any distinction in the treatment by departmental officials of Questions asked by Members of Parliament in Parliament as against Questions asked by Members of Parliament under the Freedom of Information Act?

Baroness Ashton of Upholland: My Lords, it is, of course, a different regime, as my noble friend will know. The two processes are not the same. The rules on Parliamentary Questions are very clear. There is a code for civil servants. Part of the Ministerial Code is that Ministers should answer their colleagues in Parliament as accurately, in as timely a way and as appropriately as possible. That is the basis on which Questions are answered in your Lordships' House.

Lord De Mauley: My Lords, the Ministerial Code requires Ministers to give accurate and truthful information to Parliament but does not mention the completeness of the Answer. Surely the Lord President would agree with me that there is a case for amending the code to prohibit omission in answering PQs.

Baroness Ashton of Upholland: My Lords, if one is answering accurately, surely that would deal with the issue of omission. If noble Lords would like to bring me examples of where they think that things have been omitted, I will be more than happy to look at them. My personal view—and the way in which I have always acted as a Minister, or tried to—is that Ministers should give the information that actually answers the Questions that have been put before them as far as they are able to within the inevitable constraints that exist. If noble Lords have examples, my colleagues would like to know what they are as well.

Lord Swinfen: My Lords, the Leader of the House said in an earlier reply that information had to be got from Ministers in another place. Is she not aware that all Ministers in this House are answerable for the Government as a whole and not just for their departments?

Baroness Ashton of Upholland: Yes, my Lords, that had not escaped me. I said that, in order to make sure that the information is accurate, Ministers who have policy responsibility in another place are required to clear the Answer, as the noble Lord knows. I take responsibility for all departments in your Lordships' House but I would not pretend that I had at my fingertips the detail of every aspect of government policy. Surely the most obvious thing to do in those circumstances is to ask the colleague who has responsibility to make sure that the information is accurate.

Consumer Credit

Lord Dykes: asked Her Majesty's Government:
	Whether they will restore controls on the terms of consumer credit.

Baroness Vadera: My Lords, we have no plans to place controls on access to consumer credit. However, the changes brought in with the Consumer Credit Act 2006 contain important new consumer protections and stronger powers for the Office of Fair Trading to take action against lenders that engage in irresponsible lending practices.

Lord Dykes: My Lords, I thank the Minister for that Answer. If the interest rate mechanism is not sufficient to stop the excesses in markets that we have seen recently with the bad debt mountain getting out of control and more and more people in financial distress—not only with the collapse of mortgages but also because of personal loans for consumption on hire purchase and credit sales—is it right that we, unlike some other countries, should have got rid of other controls such as the minimum deposit rate and maximum repayment period many years ago? Should not the Government look at this again?

Baroness Vadera: My Lords, I would rebut at least four or five of the points that the noble Lord makes but, on the specific Question, we believe that term control or interest rate caps, which were introduced in World War II and used intermittently in the 1950s and 1960s, are not appropriate for a liberalised market economy. They also lead to unintended consequences. In particular, they restrict access to essential credit for the poor and the vulnerable and therefore do not help the people that we are seeking to help. There is evidence from, for example, Germany and France, where these restrictions sometimes apply, of an increased resort to illegal lending with very inappropriate levels of interest rates. In states of the United States where there are caps there is evidence of decreased products for the poor and the vulnerable relative to states which do not have caps.

Lord Borrie: My Lords, when we had term controls in this country, were they not often readily evaded? For example, when a trader was selling a new car on credit he would artificially inflate the value of the old car that was being traded in. Such controls are really too easy to evade to make them worth while. Is it not much better, as the Minister implied in her first Answer, to use the increased powers under the Consumer Credit Act 2006 so that irresponsible lending is treated as an unfair or improper practice—I forget the appropriate word—and the licence is then at risk?

Baroness Vadera: My Lords, my noble friend is right: the real issue is the lack of transparency that arises out of these controls with increases in premiums elsewhere. In the 1950s and 1960s they were not really used for consumer credit but for controlling inflation and the balance of payments, and we simply do not live in that kind of economy right now. However, the Consumer Credit Act 2006 brought in a large number of powers, now in the process of being embedded in regulation, which will help with responsible lending and ensure that the licensing regime helps consumers.

Lord Campbell-Savours: My Lords, the Minister referred to the effects that this would have on the poor. Is the reality not that the poorest people in society, living on vast estates throughout the United Kingdom, are paying often the highest interest rates in a totally unregulated market? Is there not a requirement for the Government to intervene in that area to protect the very groups that we in Parliament are supposed to represent?

Baroness Vadera: My Lords, the Government have intervened exactly when it comes to home credit, which a large part of the market that my noble friend refers to is dependent on. There was a Competition Commission inquiry in 2006 and some of the measures which resulted from it are currently being embedded. That includes increasing transparency and allowing for portable credit that will enable poor and vulnerable consumers to access other forms of finance. We have also provided significant funding for debt advice and financial capability advice, which is the best way to help the poor and vulnerable.

Lord Lawson of Blaby: My Lords, is the Minister aware that while I endorse pretty well everything she has said, there is nevertheless a further dimension: to ensure that those institutions that lend imprudently are not bailed out by the taxpayer for the consequences of their mistakes?

Baroness Vadera: My Lords, if the noble Lord is referring to Northern Rock, I think he will find that we "bailed out" depositors and the public, not Northern Rock's shareholders. It is important to note that in the current climate we face a very different environment from the one we faced in the early 1990s: inflation is low at 2.5 per cent, compared with 7.5 per cent then; interest rates are at less than 6 per cent, compared with 15 per cent; and we have had 64 consecutive quarters of growth and a record level of employment. So we are not in a position of having to bail anyone out.

Lord Rotherwick: My Lords, the Minister says that inflation is at only 2.5 per cent. Why is it that fuel, mortgages and a range of other things have increased by perhaps 20 per cent or 25 per cent? It is just not consistent with saying that the rate of inflation is only 2.5 per cent.

Baroness Vadera: My Lords, those are independent figures provided by independent forecasters and by the Bank of England. Nevertheless, the noble Lord is correct to point out that we face a difficult time ahead. We must not underestimate that, particularly when it comes to fuel, commodity and food prices, as well as the small number of people who are having to remortgage at a time when there is disruption in the financial markets.

Lord Tomlinson: My Lords, does my noble friend agree that if Members opposite want to start nit-picking on certain details of the economy, you could easily take them for a trip down memory lane and remind the noble Lord, Lord Lawson, of the chaos over which he presided in the days of 3 million unemployed and double-digit inflation? Most Members on this side of the House would congratulate the Government on the work they are doing.

Baroness Vadera: My Lords, I thought I had just taken a trip down memory lane. I thank the noble Lord.

Voluntary Organisations

Lord Judd: asked Her Majesty's Government:
	Whether their grant-making policy towards individual voluntary organisations is influenced by the significance given to advocacy in their activities.

Lord Davies of Oldham: My Lords, the Government recognise and support the independence of voluntary organisations to advocate for their community and campaign for change, irrespective of any funding relationships that might exist. The Government are also committed to increasing the capacity of voluntary organisations to act independently through, for example, the £130 million Grassroots Grants programme.

Lord Judd: My Lords, while I thank my noble friend for that positive reply, and put on record the fact that many of us who are trustees of voluntary organisations and charities welcome the positive and co-operative attitude of the Government towards the work of charities, is he nevertheless aware that the Charity Commission is concerned about perceptions in the voluntary and charitable sector that it is not altogether free from influence? Research recently undertaken by the Charity Commission demonstrated that only 26 per cent of organisations receiving government funding believed that they were totally free of influence in their priority. Because advocacy is such a vital part of furthering the objectives of charities, what can my noble friend and the Government do to reassure charities, and not only this House, that this is not the position of the Government and that the Government are fully behind their advocacy work?

Lord Davies of Oldham: My Lords, I am grateful to my noble friend for his opening remarks, in which he recognises the progress that the Government have made. As I indicated in my original Answer, we are committed to the independence of voluntary organisations and their ability to carry out the role of advocacy for their communities and causes. It will take time for all charities to recognise the shift in policy that has taken place. It is the job of the Charity Commission to monitor this overall position and to see that it is fulfilled accurately. I have no doubt that it will fulfil these obligations.

Lord Maclennan of Rogart: My Lords, do the Government also recognise that the independence, effectiveness and value for money of third-sector organisations would be better secured if, when they are dependent upon government grants, they could be core funded for a period of years, rather than having to seek funding annually?

Lord Davies of Oldham: My Lords, I broadly agree with that sentiment, and so do the Government. We are looking towards a time when we are able to see three-year funding of charities, so that the element of independence is thereby enhanced. The noble Lord will appreciate the change in the position of the Charity Commissioners over the past 12 months, and that it takes a little while to work this policy through. The Government are thinking along exactly the lines that the noble Lord suggests.

Lord De Mauley: My Lords, how is the stipulation that initiatives which involve direct lobbying of the British Government are ineligible for DfID's development awareness fund reconciled with what the Minister said earlier and to the statement by the Cabinet Office Minister that charities should not feel constrained from biting the hand that feeds them?

Lord Davies of Oldham: My Lords, the position is clear. Charities will have their independence protected, whatever the source of their resources. The Government are determined that where they receive grants, they should not feel in any way inhibited from challenging areas of government policy that relate to their work. That is different from pressure-group activity. There is a world of difference between the work of charities seeking objectives within the charitable framework and pressure groups. The Government have a different perspective, as I am sure any serious analyst would, on the role of pressure groups.

Lord Walton of Detchant: My Lords, having spent much of my professional life involved with charities of one kind or another, I confirm the tributes that have been paid to the contributions made by the charitable world to medical research, medical care and many other areas. However, does the Minister agree that something that, from time to time, prejudices decision-making in the charitable sector, is the same issue that has often bedevilled decision-making in certain parts of the National Health Service? I refer to this problem as "decibel management"—he who shouts loudest and longest often tends to win the day. It is not an easy situation to resolve. Does the Minister have any ideas about how that can be overcome?

Lord Davies of Oldham: My Lords, the whole House recognises the very significant role that charities play in the development of medical research and development in this country and the extent to which they supplement the work of the National Health Service. There is always the danger that those with the greatest resources can make the greatest noise but judicious government and the values that obtain in the Medical Research Council, on which the noble Lord served with such distinction for many years and on which I served for three undistinguished years, should obtain throughout government, too.

Baroness Miller of Chilthorne Domer: My Lords, is the Minister aware of the report produced last year under the chairmanship of the noble Baroness, Lady Kennedy of The Shaws, in which leading charities state that they have great difficulty with the differentiation that the Minister makes between a charity and a pressure group? Does he accept that many prime charities, such as Christian Aid, Oxfam or the RSPCA, sometimes have to act as pressure groups in order to fulfil their charitable role?

Lord Davies of Oldham: My Lords, no one gainsays that—charities often apply hugely important and successful pressure. However, I sought to distinguish between support from the Government in the form of smaller grants to smaller charities to create essential building blocks so that the charities can work effectively in their local communities and the large, well-established charitable foundations that are neither dependent on government for funding nor scared of presenting their case to government.

Planning and Energy Bill

Brought from the Commons; read a first time, and ordered to be printed.

European Union (Amendment) Bill

Baroness Ashton of Upholland: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.
	House in Committee accordingly.
	[The LORD SPEAKER in the Chair.]
	Clause 2 [Addition to list of treaties]:

Lord Astor of Hever: moved Amendment No. 25:
	Clause 2, page 1, line 12, after "excluding" insert—
	"(i) Article 1, paragraph 50, inserted Article 28E TEU, relating to permanent structured co-operation in defence; and(ii) "

Lord Astor of Hever: The purpose of Amendment No. 25 is to remove from the treaty the framework now named,
	"Permanent Structured Co-operation in Defence",
	rather than "enhanced co-operation". This is a probing amendment to generate debate. We do not believe the Government should ever have accepted this provision. Indeed, back in 2003 Peter Hain said:
	"The UK has made it clear that it cannot accept the proposed ESDP reinforced co-operation provisions".
	But at the negotiating table the Government caved into European pressure and gave way. These Benches entirely agree with their original stance. This is perhaps the most dangerous of the treaty provisions relating to European defence. It takes us further down the road towards the point where a single European defence is used to excuse the evasion of serious national defence capabilities.
	The Explanatory Notes published with this Bill state, as the twelfth of twelve points within Note 5, that the principal changes made by the treaty of Lisbon include:
	"Revised procedures for 'enhanced co-operation', under which fewer than all the Member States may be authorised to exercise EU competences through the EU Institutions. At least 9 Member States must participate initially and other Member States may participate following the initial authorisation".
	We do not object to defence co-operation between the nations of Europe. Indeed, we welcome it and we would wish to encourage it. For such co-operation between one nation and one or more others to be enhanced would be a move in the right direction, but why do nine nations have to get together? Why does their co-operation have to be organised through Brussels? Why should they be exercising EU competencies?
	The provision as it now stands points towards an inner core of countries capable and willing to participate fully in an integrated European defence. Other member states that choose not to join will be able thereby to opt out. They will thus be able to take a minimal role, both in self defence and in collective defence. That is how it works out and NATO's overall defence capability will not be improved as it needs to be. That capability will be damaged as some—perhaps the smaller countries—exclude themselves from such co-operation and decide to take no further part in either European defence integration, or more worryingly, NATO. They will be able to meet minimal EU military commitments, shifting the burden of fulfilling meaningful NATO expectations on to the larger EU members such as France, Germany, and of course, the UK.
	Outside these three countries, EU countries spent an average of 1.7 per cent of GDP on defence in 2006. If permanent structured co-operation goes ahead there will be even less incentive for these countries to increase their military capabilities than is currently the case. NATO already suffers from a lack of military capability among its smaller members. This provision will make this worse. The treaty provides no reassurance as to how the PSC will operate. As with so much else, nothing has yet been finalised. Everything is to be decided after ratification. We have no idea of how many troops or how much money will be committed. Will the Minister tell the House what discussions have been had with other likely participants as to their plans for PSC? What other countries have stated their intention to join?
	We fear that the Government are committing this country to sign up to an undefined commitment that will have no benefit for NATO's capability but which will needlessly drain our military capability, already under the most enormous pressure. When the Minister comes to reply to this amendment, the Committee—and indeed the country at large—would welcome a reasoned statement of HMG's precise intention in this respect. I beg to move.

Lord Lee of Trafford: I am sorry that the noble Lord, Lord Astor, takes such a negative view of permanent structured co-operation. The provision for permanent structured co-operation between a smaller group of member states is laid down in Article 28A(6), which allows greater co-operation in the area of capabilities. Article 28A(7) establishes a clause for mutual defence but without a security commitment along the lines of NATO's Article V.155. The provision for mutual defence is limited under Article 27(7) to,
	"the obligation of aid and assistance, by all means in their"—
	member states'—
	"power, in accordance with Article 51 of the United Nations Charter. This shall not prejudice the specific character of the security and defence policy of certain Member States".
	Article 28E together with Article 28A(6) sets out the arrangements whereby member states can engage in permanent structured co-operation in defence matters.
	The criteria and capability commitments for doing so are set out in the protocol on permanent structured co-operation. Article 1(b) of that protocol states that participating member states should have the capacity to supply by 2010 at the latest, either at national level or as a component of multinational force groups, combat units and supporting elements, including transport and logistics. Those would be capable of deployment within five to 30 days, in particular in response to requests from the UN. They would be sustained for an initial period of 30 days and extended up to a period of 120 days.
	The protocol also sets out provisions in the area of capability harmonisation, the pooling of assets, co-operation in training and logistics, regular assessments of national defence expenditure and the development of flexibility, interoperability and deployability among forces. The possible review of national decision-making procedures with regard to the deployment of forces is also emphasised.
	Jean-Yves Haine, of the Institute for Security Studies, commented on permanent structured co-operation when it was introduced in the constitution:
	"The real novelty lies in the encouragement to co-ordinate the identification of military needs, to specialise national defence and to pool capabilities ... If implemented, permanent structured co-operation could offer a precious framework in which to change the dynamics of European defence".
	That is why we on these Benches support permanent structured co-operation.

Lord Bach: We had an excellent debate on defence issues during our previous Committee day. Amendment No. 25 relates to the provision on permanent structured co-operation.
	Our discussion last week highlighted that capability development remains at the heart of being able to address effectively the security challenges facing us. As my noble friend Lord Robertson reminded us in his graphic phrase, we cannot send a wiring diagram to a crisis. Permanent structured co-operation is a new mechanism that is designed to address precisely that need, and it is focused solely on military capability development, as set out in the treaty article that has been referred to and the accompanying protocol. I underline that it is not about a smaller inner grouping undertaking operations. There do not have to be nine member states involved in PSC.
	Improving the military capabilities of EU partners—this is cross-party—is a key UK objective. Improved military capabilities, whether it is having more deployable and flexible forces or new equipment needed for modern operations, will produce more equitable European burden-sharing and make interventions more effective. The mechanism of permanent structured co-operation is designed to take advantage of the ability to generate political leverage in the EU. Member states are more likely to sign up to developing further their capabilities if the alternative is being left out in the cold and left out of an EU grouping.
	As one of the foremost capability players in the EU, we would expect to see the UK playing a key role in establishing and leading permanent structured co-operation. This provision is a good example of a pragmatic, UK-inspired initiative that is focused on producing practical improvements on the ground. There is danger of confusion between enhanced co-operation and PSC. They are separate mechanisms. The main difference is that PSC is confined to military capability development, and it has nothing whatever to do with some inner group co-operating on defence issues, whether those issue be common defence or anything like it. I think the noble Lord, Lord Lee, was making that point.
	As has often been said, there is but a single set of forces in Europe. Investments to European military capabilities benefit not only ESDP but NATO. The EU-NATO capability group will provide a mechanism to ensure that capability improvements leveraged through permanent structured co-operation are compatible with capability development in NATO.
	Permanent structured co-operation involves some QMV decision-making: to establish permanent structured co-operation; to confirm participation of a member state that subsequently wishes to participate; and to suspend participation of a member state. This is in line with our objective to make PSC easier to set up and easier for member states to join—and to make it easier, frankly, to suspend member states that do not perform and do what they have signed up to do. All other decisions will be taken by participating members by unanimity.
	The noble Lord, Lord Astor, asked what discussions we had had with other countries. Until the treaty is ratified, we will not engage with partners in detailed discussions on how to implement the provision, but we expect to do so once the treaty is ratified.
	The European Union Select Committee considered carefully the PSC provisions in the treaty in its deliberations and in its unanimous report. It is worth quoting—not at too great a length—the conclusions on page 202 of its much praised report. The committee said:
	"Permanent Structured Cooperation is a form of enabling framework allowing the Member States who so wish to co-operate more closely in the area of defence capabilities development".
	The committee went on:
	"Permanent Structured Cooperation is not a major departure from current practice. Rather, it represents a continuation and deepening of current forms of co-operation. Its objective is to create a political dynamic among Member States towards the improvement of European defence capabilities. Most of these new capabilities should be available to both NATO and the EU and could therefore serve to strengthen both organisations".
	The committee concluded that,
	"the new Treaties will provide that 'national security remains the sole responsibility of each Member State'".
	That, I know, is one of the great concerns of the House.
	In putting forward the case for PSC, I can justifiably claim the almost complete support of our EU Committee.

Lord Astor of Hever: I am sorry that the noble Lord, Lord Lee of Trafford, felt that I had taken a negative line. I thank the Minister for his full response and I agree that we had a useful debate on defence issues last week. I am not totally reassured by his assurances. We are concerned that the details of how the provision will work will be decided only after the treaty's ratification. We do not believe that it will help to expand European military capabilities and we worry that it will undermine NATO's attempts at improving its future military capabilities. We think that the Government were quite wrong to have accepted this provision. However, this was a probing amendment and I therefore beg leave to withdraw it.

Amendment, by leave, withdrawn.

Lord Howell of Guildford: moved Amendment No. 26:
	Clause 2, page 1, line 12, after "excluding" insert—
	"(i) Article 1, paragraph 55, new Article 46A TEU, relating to the legal personality of the European Union; and(ii) "

Lord Howell of Guildford: We come now to amendments that concern the conferring of a legal personality on the European Union in toto. They raise a number of issues that need careful scrutiny, in accordance with our remit and the recognition that we have the task of line by line scrutiny to perform on this complex and wide-ranging Bill, and on the treaty it embodies. Here, once again, we are largely in the hands of the lawyers—which may be nice for the lawyers—and of the Court, as we are on many issues in the treaty. This is because the treaty, which is almost word for word the constitution, lacks in itself the safe, secure legal provision to circumscribe and define the powers of the EU institutions, as opposed to the powers of member states. We will come to this debate later, when we look at competencies. All the while, we have to be aware that it is legal decisions and lawyers' judgments and assessments, views and counterviews that will decide how these things work out.
	I anticipate that the defence of this provision in the treaty from the Government and their apologists will be that there is, of course, nothing very new—that the old European Community had just such a power to sign international treaties and had, in a sense, a legal personality. Indeed, even the European Union under the previous treaties had a treaty-signing power, which automatically gave the EU a kind of legal personality, which has been recognised by a number of professors and legal experts. Now the difference is a big one—with the collapse of the Third Pillar into the combined new constitutional structure of the Union, this power extends considerably from the limits of old Pillar 1 issues, mainly on trade, which the European Community possessed, to foreign policy, defence, crime and judicial issues, and covers all the Second and Third Pillar issues that were previously beyond the reach of the EU.
	This is a big change. We will have different views on whether it is good or bad, but we must recognise that it is there. It will be, in the words of the former Commission President and former Prime Minister of Italy, Romano Prodi,
	"a gigantic leap forward. Europe can now play its role on the world stage thanks to its legal personality".
	Something very big is happening and we cannot be blind to that. The French authorities helpfully went on to explain that:
	"The European Union naturally has a vocation to be a permanent member of the Security Council, and the Constitution will allow it to be, by giving it legal personality".
	Even the present Labour Government choked on this one, because this is going very far. I do not know about the position of the Lib Dems obviously, because that is never too easy, but the Government found this very awkward.

Lord Maclennan of Rogart: Just to assist clarification of the Opposition's view, I ask whether the noble Lord is saying that the European Union did not have legal personality for the purpose of entering into international agreements.

Lord Howell of Guildford: I do not want to obfuscate in any way, but I said a moment ago that the European Community, under previous treaties, had a legal personality and that the EU under previous treaties, by virtue of its power in certain limited areas to sign international treaties, de facto had a degree of legal personality. That is argued by learned professors in lengthy papers. I hope that I understood the probably very deep question of the noble Lord, but that is what I said and that is the position. The clarification that I now seek from the Government on behalf of Parliament regards exactly what is implied in the future manufacture, construction and architecture of treaties that are negotiated and put together by the European Union. Obviously, some new questions arise.
	I was referring to the past views of the Government, because those views have changed. Mr Hain, on behalf of the Government, said that we can support a legal personality for the Union only if the special arrangements for CFSP and some aspects of justice and home affairs have been protected. In our view, they certainly have not been protected. The previous Prime Minister, Mr Blair, specifically told the other place at the beginning of his premiership that,
	"others wanted to give the European Union ... legal personality across all the pillars of the treaty. At our insistence, that was removed".—[Official Report, Commons, 18/6/97; col. 314.]
	It seems that that insistence has evaporated and some very important questions arise, which I want to put to the Minister. The first is: what powers will the high representative—the Foreign Secretary of the Union—have in negotiating major new international treaties, particularly those governing, as all international treaties do, important areas of foreign policy? What will be the national parliamentary check on Ministers where major positions are taken up or conceded? I realise the difficulties involved as they have always been faced by Governments wishing to negotiate, with parliaments rightly wishing to know what is being conceded, argued or claimed, as it were, in private. I do not deny the difficulty, but we have heard a lot about giving Parliament a bigger say in decisions—about going to war, for instance—so what about powers over binding treaties in our name that could lead to major commitments in the future? Just what are we in for on that front?
	At the very least, as our Amendment No. 26A proposes, both Houses need a clear report before the Bill rolls forward and it comes into force as an Act, setting out how the independent or interdependent representation of our national interest and purposes in international bodies and other international arrangements—arrangements that we value greatly in this country, giving us considerable sway on and entrée to the global scene—are going to be upheld once the extended legal personality power for the whole Union is in place. We believe that a report of that kind should require the affirmative resolutions of both Houses.
	There was a time when arguing that Parliament should have a greater say in treaties before they were finally signed was a bit out of fashion. We were told that it was all a matter for the Executive and the royal prerogative and so on. I remember many decades ago being impertinent and bold enough as a young Member of the other place to argue that I was a Parliament man. Most people had no idea what one was talking about, but nowadays things have changed and it is all the rage to call for more parliamentary powers over the Executive and the royal prerogative, and for a greater say in all aspects of executive decisions. Indeed, as I have already mentioned, the proposal that Parliament should have a say in the declaration of war is now before us. However, there is a clear move in the treaty, alas, to make for fewer parliamentary powers by our Parliament over executive action, as competence passes elsewhere and accountability is obviously diluted. That trend, as in so many spheres that we are debating in the Bill, is not toward a stronger and more democratic Europe closer to the people but is in the wrong way. It needs to be resisted. For those reasons, I beg to move.

Lord Maclennan of Rogart: Lawyers have given their views about this matter, but what has not been made clear by the noble Lord, Lord Howell, is the unanimity expressed in those views. Indeed, those views have been supported by the Select Committee of this House, which set out very clearly in its report on the impact of the treaty that the provisions on legal personality were not innovatory and simply reflected what was de facto the position under the treaty of the European Union, although it had been explicitly provided for in the European Community.
	The most compelling individual evidence given to this House was in the hearings of Sub-Committee C, chaired by my noble friend Lord Roper, by Professor Alan Dashwood. He is a lawyer well known to members of Her Majesty's Opposition, as I believe he advised them during the treaty of Maastricht on this very point. The noble Lord will no doubt have read his evidence, which indicated bluntly:
	"It is my view that the recognition of the legal personality of the European Union is a purely technical change".
	He went on to say:
	"The present situation, which is quite amusing for lawyers but absurdly complex, is that the European Union considered as a whole has a separate legal personality for the European Community but its own de facto legal personality for the purposes of the second and third pillar".

Lord Forsyth of Drumlean: I am most grateful to the noble Lord. Can he help me with a problem? If nothing has changed and the EU already has this legal personality, why does this provision have to be in the treaty at all?

Lord Maclennan of Rogart: I think it is clear that the purpose of this exercise was to clarify the matter beyond the sniping that has sometimes taken place and beyond the exaggeration by some commentators of the significance of the issue. The Union is clearly proceeding towards making comprehensibility a factor. I believe that recognising that the new treaty will spell this out will end the oddity of the situation in which explicit legal personality is provided for in respect of the trading matters under the original European legislation, the European Act and other international matters. The question of whether this has, as has been suggested by some anti-Europeans, the significance of conferring on the Union the attributes of a state has also been bluntly and clearly answered by the report of the European Union Select Committee. In answer to a question from the noble Lord, Lord Swinfen, whether de facto possession of a legal personality makes the Union a state, Professor Dashwood answered:
	"No it does not. There are many international organisations that have international legal personality. States are in the unique position of being full subjects of the international legal order ... In the case of the European Union, the European Community has legal personality, so does the European Central Bank, so does Euratom".
	It is clearly nonsense to suggest that the explicit conferral of a legal personality on the Union in any way makes this a conferral of a state on the Union.
	It has been suggested that in some way this muddies the waters so far as concerns the representation of the Union in international organisations, such as the Security Council of the United Nations. Once again, the evidence is absolutely clear from all witnesses that this House has heard. The noble Lord, Lord Kerr of Kinlochard, asked questions about this and was again clearly answered that the status of individual member states was unaffected by the conferral of a legal personality on the Union as a whole. At any time, two permanent members or other members of the European Union may sit on the Security Council, and their role is in no way affected or diminished by the conferral of a single legal personality on the Union.
	Perhaps most importantly, the question needs to be addressed of the impact of conferring a legal personality upon the competence of the European Union to enter into international agreements. It is clear, again without dissent from those lawyers who spoke to the House, that the conferral of a legal personality in no way affects the European Union's competence—the terms of the European Union treaty specifically provide for its competence to enter into international agreements. Nor does it affect the relative competences of the European Union and its member states, as summarised in the opinion of the European Union Select Committee.
	I rely heavily on evidence from that committee, because it is a body representing many different views about the virtues and limitations of the European Union. That that judgment was unanimously accepted seems compelling to me, and ought to put the whole debate about the legal personality to rest.

Lord Pearson of Rannoch: I was waiting for the noble Lord to finish his point. Would he agree that, of the 24 members of your Lordships' European Union Select Committee, only one is a declared Eurosceptic? Even he does not favour the position shared by millions of British people: that the United Kingdom should leave the European Union. Does the noble Lord understand that many of us—I made this point in November when the committee was reappointed—do not accept your Lordships' Select Committee report as having the authority which the noble Lord would wish to confer on it?

Lord Maclennan of Rogart: There is a spectrum of views among members of the committee, from those who might be described as enthusiastic Europhiles to those who are more sceptical. I do not accept for a minute that that in any way diminishes the authority of the unanimous view expressed by the committee on those matters. I believe it is also open, although it would be unusual, to those who dissent to indicate whether they did and were not in agreement. No such expressions of dissent were made.

Lord Pearson of Rannoch: We had this debate the other evening, when the noble Baroness, Lady Symons, was attacking my noble friend Lord Blackwell, the sole Eurosceptic on that committee. Does the noble Lord agree that it is not all that easy to produce a minority report of one? If, as he says, there is a broad spectrum of views on the committee, would he be good enough to name the other Eurosceptics on it?

Lord Grenfell: I hesitate to intervene, but I feel I should come to the defence of the committee and, particularly, its membership. One important consequence of the committee's work on the Lisbon treaty was to produce what, by any standards, is a thoroughly objective impact assessment. The noble Lord shakes his head, but I assure your Lordships that having sat in the chair for many long days while working on this report, there was an absolute consensus in that committee that we would thrash out the issues around the table, but that what we wrote would be an objective impact analysis of the treaty and what changes it would bring about. So I have some reservations about and feel rather hurt by the implication that this was somehow a political exercise dressed up as something entirely objective. It was not.

Lord Maclennan of Rogart: I am very grateful to the chairman of our committee for that statement, which I think puts the matter beyond further argument.
	In making my final point about the issue of single legal personality I want to reflect briefly on the reasoning already expressed by the Government, which it is perhaps better for the noble Baroness to express for herself and for them, but there were earlier stages in the discussion of this issue when the single legal personality was not explicitly endorsed for inclusion in the treaty because the Government, in their diplomatic exercise, were seeking to put beyond doubt that the retention of the common foreign and security policy would be a separate matter requiring unanimity in the Council before international agreements were entered into. They wanted that to be clearly defined, as it has been, in a separate treaty. That makes it understandable that the Government took the position that they did.
	That position has changed and the Government have—to my mind, sensibly—accepted that there is a need to bring together the actuality—the existence of de facto legal personality—with a juridical legal personality in respect of other matters, such as trade. That is a sensible clarifying move, and one that I hope will now be considered to be beyond dispute, at least by lawyers. I find the hesitation about lawyers rather surprising, because I am not entirely clear who else the noble Lord believes we should turn to for expert advice on interpretation of the language of treaties.

Lord Stoddart of Swindon: The noble Baroness has spoken to a number of us to ask us to keep our speeches as short as we possibly can. That is exactly what I intend to do, but I want to support the amendments. They are important and they should be properly discussed and replied to.
	I say to the noble Lord, Lord Maclennan, once again that he makes a big mistake in accusing those of us who believe that we should not belong to the European Union of being anti-European. That is a serious charge that I refute absolutely. I am not anti-European, but I do not want to be governed by the system imposed on us by the European Union. I hope that he will not again accuse people like me of being anti-European.
	As the noble Lord, Lord Howell, pointed out, there seems to be a complete difference between what our Government believe a single personality means and what other people think it means. There is no question but that Romano Prodi jumped with joy when he saw the article appearing in the constitution, now transferred to the Lisbon treaty. He said that this is a gigantic step forward. Where a chap like Prodi speaks like that, we must take some notice of him. When he is supported in that view by the French during the referendum and then when you listen to people in this House, we are entitled to ask what the position of Her Majesty's Government really is. Did they oppose it in the first place? Have they opposed it at any stage? Did they oppose it during discussions on the constitution? Did they oppose it during discussions on the treaty? Perhaps they are not going to defend it and I hope that they will not. .But if they are going to defend it, why on earth are they going to defend this article being in the treaty when they were previously against it and other people think that it is going to take the business and the policy of integration forward by a great step?

Lord Pearson of Rannoch: It may be that the noble Lord, Lord Maclennan, and others favour this project of European integration—I associate myself there with the remarks of the noble Lord, Lord Stoddart. The process of European integration, the EU, is a completely different thing from the Europe of nation states which we all love and support.
	Legal personality is, to some of us, the most important aspect of the new treaty. Today, Bruno Waterfield of the Daily Telegraph quotes from various bureaucrats involved in drawing up the new constitutional position. He quotes one of these bureaucrats as saying:
	"A lot people are just beginning to realise what they have signed up to".
	One EU official said that the Lisbon treaty was,
	"more profound and far-reaching than anything else in the EU's 50 year history ... for us here it is the most important time in our lives. There has never been such a constellation of jobs and institutional changes aligned at the same moment. A lot of people are talking about a new epoch".
	That is what is going on in Brussels. It is underlined and supported by the new legal personality, which is regarded as the jewel in the crown in many of the corridors there.
	I do not know whether the Leader of the House is aware that the proposal for legal personality for the whole European Union—as opposed to just for the Commission in trade matters and so on which we agree has been there since 1972—was vetoed by Chancellor Kohl at Maastricht. He thought that it gave the European Union too much power. That power will, in the end, be exercised by the Luxembourg Court of Justice on whose judicial activism we have already commented in these proceedings and doubtless we will return to them.
	In the draft constitution, the wording for legal personality was that the EU,
	"shall have legal personality superior to that of the member states".
	However, in the final version the last seven words were amended, in order, I understand, not to expose this huge advance of the EU's power too clearly to the unhappy public.
	Can the Minister tell us what limits are put on this new legal personality? The noble Lord, Lord Howell, has already mentioned that the pillars—justice and home affairs, and the common, foreign and security policy—are now gathered under this legal personality. Perhaps the best way of asking the Minister that question is to quote two Written Answers she sent to me on 28 February this year when I asked:
	"On which areas of United Kingdom national life the European Union is not able to legislate".
	I also asked her:
	"On which new areas of United Kingdom national life the European Union will be able to legislate if the Lisbon Treaty is ratified".—[Official Report, 28/2/08; col. WA 133.]
	The noble Baroness has not yet answered that question. It would be helpful if she did so this evening, because it would enable us to define the borders of this new power, which we maintain do not exist. In the end, this power confers on the European Union, supported by the Court, almost unlimited power, bearing in mind the European Charter of Fundamental Rights and various other aspects of the treaty.
	I will quote the noble Baroness's Answer to her, in case she does not have it to hand:
	"For the first time the Lisbon Treaty defines the Union's competences, setting out where the EU can and cannot act".
	We will come to that later. Then she says:
	"These competences are set out in Article 2(12) of the Treaty of Lisbon ... presented to Parliament in December 2007. The treaty explicitly states that competences not conferred on the EU remain with member states".—[Official Report, 28/2/08; col. WA 133.]
	What are those competences? What remains with the member states in which the EU cannot interfere at all when it has this new overarching legal personality that is superior to that of the member states?

Lord Tomlinson: If you invent fairy stories and keep telling them, they acquire a life of their own; they go down as bedtime reading for children down the generations. What we have is much more precise than the noble Lord, Lord Pearson of Rannoch, would have us believe. The whole question of legal personality is not a new phenomenon in international organisations; it is a constancy. It applies in the United Nations and in the International Criminal Court. It even applies in the Universal Postal Union. All these bodies have legal personality.
	The change that has been made, bearing in the mind the need to clarify "legal personality" for the European Union, is very simple and quite clearly backed up by Declaration 26 of the Intergovernmental Conference. For the sake of everyone having the same song sheet, I will briefly read one sentence from Declaration 24 on the legal personality of the European Union:
	"The Conference confirms that the fact that the European Union has a legal personality will not in any way authorise the Union to legislate or to act beyond the competences conferred upon it by the Member States in the Treaties".
	That will satisfy the overwhelming majority of people. I do not expect it to satisfy the noble Lord, Lord Pearson of Rannoch. He will continue to tell his fairytales, and the rest of us will continue to ignore them.

Lord Forsyth of Drumlean: Perhaps the fairy story that we need to think about is Little Red Riding Hood and the question that we need to ask ourselves is who is in the bed. Is it grandma or something different? The words that the noble Lord read out are completely irrelevant. He is confusing two things. One is what the European Union will do; the other is the question of its legal personality. As I asked the noble Lord, Lord Maclennan, if all this is just clarification and the EU has had this personality before, why is it necessary to have this in the treaty? As the noble Lord, Lord Stoddart, asked, where were the Government on this and why did they fight so hard to prevent the creation of this legal personality through the treaty if this is all a fuss about nothing? We come back to what we were told at an earlier stage when we discussed the same document, which then was called the constitution and which at one stage Mr Peter Hain and others argued was simply a tidying-up exercise. So we are back to the argument that this is just a tidying up exercise and nothing of any great import. I very much support my noble friend Lord Howell in tabling the amendments which go to the heart of the issue.

Baroness Ludford: The noble Lord talked about confusion, but does he accept that one source of the confusion is assuming that a legal personality is equivalent to statehood, which it is not? The fact that many international organisations have legal personality shows that it is not an attribute of statehood. Therefore, it is not conferring statehood on the European Union to clarify that it has legal personality. That is one misunderstanding in this discussion.

Lord Forsyth of Drumlean: There is no misunderstanding. There are two models for developing our co-operation with Europe. The noble Lord, Lord Pearson, would rather be out of it altogether but, for those of us who wish to remain in the European Community, there is the model that sees it as an organisation in which there is co-operation between member states and there is the Liberal model, which is basically about creating a federal state and a federal Europe.
	The noble Baroness shakes her head, but I thought that the Liberals were very keen on European federalism. It is difficult to know what the Liberals think on these matters because they have not tabled amendments; they are simply acting as cheerleaders for the Government and are not providing any detailed scrutiny. However, I thought that there was support for European federalism. If you are a federalist, you want to create an organisation that has a legal personality because you want to create a country called Europe. Those of us who think that that will destroy Europe see legal personality as a particularly sensitive issue. That is why my noble friend Lord Howell is right to move this amendment.
	Having been there myself, I feel sorry for the Minister. She will no doubt reassure us that none of this really matters—that it is just a matter of clarification and the rest. However, two or three years down the line, we will find that it means considerably more than that and that there is no going back. If this is just a matter of clarification, taking it out will not make any difference to the progress of the European Union. The reason why Mr Prodi was so ecstatic is that he is a member of the group that sees Europe as having a federal structure and wants a constitution accordingly.

Lord Hannay of Chiswick: The noble Lord has given the Committee a wonderful description of one group that is charging ahead for a federal Europe and the others, who believe, as he does, in co-operation between sovereign states. Will he say why, in a large number of intergovernmental organisations that involve purely co-operation between sovereign states, the organisation concerned is given international legal personality? Why on earth is that? I can answer the question perfectly easily, although probably not in terms that are very helpful to him. The reason is that it is a useful thing to do and the totality of the member states of that organisation believes it to be so. That is precisely what the Lisbon treaty will do.

Lord Forsyth of Drumlean: I am confused; no doubt the Minister will be able to help us in her response. Those who are arguing for this say that it does not represent a change; they say that the EU has always had this legal personality and that there is no need to make a change. Therefore, why is it necessary to go further? I give way to the author.

Lord Kerr of Kinlochard: Perhaps I may help the noble Lord. The answer given by the noble Lord, Lord Maclennan, was that many thought it right to make this explicit. My answer is that many think it right to make it clear that we are no longer talking about legal schizophrenia. There was a time—from the beginning—when the European Communities had an acknowledged legal personality, which was recognised by all, and a treaty-making power. From about the time of Maastricht, when the party of the noble Lord, Lord Forsyth, was in office, it became clear that the European Union had a legal personality. It was running cities in Bosnia and had to be capable of being sued for its deeds or misdeeds. So it is clear that it had a de facto legal personality from the early 1990s. However, some still argued that it had two personalities: when it was the European Union it had one; when it was the European Communities it had another. The discussions in the first months of the convention, in which the noble Lord, Lord Maclennan, took part, established that there was no need to maintain this schizophrenia.
	The question of a single legal personality is interesting. The noble Lord, Lord Howell, asked precisely the right question: what does that mean for the powers of the high representative? What can he do with the single legal personality? The answer is, of course, exactly the same as the rotating president of the Council could do. It is not the legal personality that confers new competencies or powers; it is what the rest of the treaty says.

Lord Campbell of Alloway: After listening to the debate, I agree that the amendment serves a valuable purpose. We come full cycle again. Whether or not we have a legal personality is not the point; the point is whether or not it is a legal personality of a federal structure. It is the federal structure that matters and this debate brings out its essence. I do not wish to be a party to criticism of the membership of any committee of the House, but we are not dependent on this report. We can assess the merits of a debate that the members of the committee may well not have entertained and we can look at it as we wish. I support my noble friend because the debate brings us back to where we have to start.

Lord Forsyth of Drumlean: In response to the noble Lord, Lord Kerr, who knows a great deal about this matter, having been very much involved in the early drafting of the treaty, I need to reflect on the concept of a split personality and schizophrenia. The real schizophrenia is between those people who wish to create a federal Europe and the rest of us, who want a Europe that is based on co-operation. Therefore the concern at the heart of my noble friend's amendments, as my noble friend Lord Campbell indicated, is precisely what this legal personality will be used to achieve and what it will mean in the longer term. It is an important matter and should not be rushed through.
	I am getting signals from the Leader of the House to speak briefly—and people have spoken rather briefly—but this is of fundamental importance to the future of the Community and to our ability to govern ourselves.

Baroness Ashton of Upholland: I was not trying to signal that to the noble Lord; I was seeking to see whether or not he had finished. The noble Lord was interrupted and I thought that I would let the noble Lord, Lord Campbell of Alloway, move on from an interruption to a new speech. It was purely a point of clarification.
	I have spoken to noble Lords about how far we might get today and, as there are so many noble Lords who reasonably wish to speak in the debate, whether we could keep our remarks succinct. I rise only when I think that we have said everything that can be said and are in danger of saying it again. At that point, it benefits us all if I at least give my response to what has been said. Often noble Lords wish me to do so.
	We have to be careful that no one impugns the integrity of anyone in the House. The committee did a fantastic job in looking through the treaty and I pay enormous credit to it. I also pay credit to all the noble Lords who spent an enormous amount of time and energy reading the treaty and coming to their own opinion on it.
	The noble Lord, Lord Pearson, does not need to interrupt me. I am not impugning his integrity. I am simply saying that I think that we should, as a general way of operating, regard all that is done to improve the clarification of this treaty as being positive. In no way does that prevent noble Lords from disagreeing with conclusions that have been reached. I do not accept that, just because one holds an opinion, one cannot look at information properly.

Lord Forsyth of Drumlean: I thank the Minister for giving way. My question is about the use of this phrase "impugning the integrity" when looking at the views on a committee. Let us take as an example the committee with which the noble Baroness is involved that is looking at the future of this House. I think that I can say that all the people on that committee have a view on the reform of this House that is not in line with the feelings in the rest of the House. Her committee represents a particular view and, when it reports, I think that we will be entitled to say, "Well, they would say that, wouldn't they?".

Baroness Ashton of Upholland: I have no doubt that the noble will say that, but that committee represents the views of all the political parties. It represents policy for the Conservatives, the Liberal Democrats and the Labour Party. The noble Lord may wish to disagree, but I suggest he takes it up with his own party. The shadow Leader of the House in another place is clear in her representation of the policy.
	However, let us not get involved in that. Of course, the noble Lord is right that noble Lords can disagree with the conclusions of a committee. That is my point. What I am arguing is that we have to be a little bit careful, particularly in your Lordships' House, that we do not, by accident, impugn anyone's integrity. That is all that I want to say on that. The noble Lord was clever in getting the issue of Lords reform into this debate.
	I agree with the noble Lord, Lord Howell of Guildford, on his non-lawyer point. I am a non-lawyer, too, so I am in the happy band of people who wish to look at these issues from that important perspective. I begin by addressing the concern that noble Lords have raised about the position of the Government in 2004 and of my right honourable friend Peter Hain in his then capacity as Minister for Europe. The great concern of the Government at that point was the potential impact on the separate intergovernmental nature of CFSP—common foreign and security policy. Once safeguards had been agreed—and within the Lisbon treaty we are very comfortable with the distinct nature of CFSP—our concerns went away. Noble Lords are completely right that the Government raised concerns. The concerns, as far as we are concerned, were addressed. Once we had the present position, we were content to move towards a single legal personality.
	Noble Lords have indicated far more eloquently than I can that this is not a new or particularly unusual concept. Lots of different organisations carry legal personality. My favourites are Vine and Wine and the Western Indian Ocean Tuna Organisation Convention. There is a raft of different organisations—some very familiar to noble Lords, some less familiar—that have legal personality. It is a standard characteristic of many international organisations, including the UN, and enables them to conclude international agreements where those are necessary to carry out their work.
	As the noble Lord, Lord Howell of Guildford, said in his opening remarks, the European Community has had legal personality since the treaty of Rome in 1957. It has concluded hundreds of international agreements that cover all fields of Community activity—trade and development with third countries and international organisations, for example. As the noble Lord, Lord Forsyth, knows and as the noble Lord, Lord Kerr, described—and I will not put it in terms of schizophrenia—the European Union was not expressly given legal personality when it was set up. As the noble Lord, Lord Maclennan of Rogart, said, it has always been regarded as having legal personality in that it now has the power to conclude agreements in its own name. It has concluded about 100 such agreements in its own right.
	Since the treaty of Amsterdam in 1997, it has had the explicit power to do that in CFSP and in police and judicial co-operation in criminal matters. So, for example, agreements with the United States of America on extradition and mutual legal assistance were made in 2003, a co-operation agreement with the International Criminal Court was made in 2006 and there have been a number of agreements concerning EU police missions referred to by the noble Lord, Lord Kerr, to operate in the Former Yugoslav Republic of Macedonia, Bosnia-Herzegovina, the Democratic Republic of Congo and Afghanistan.
	What would happen at present—this is the simplest way of describing why we need to move to the single legal personality—is that the European Union and the European Community would need to accede separately to agreement, each within their own area of responsibility. That inevitably creates a degree of complexity, particularly for the third country or organisation concerned when, instead of concluding agreements with one organisation, it has to do so with two. The treaty simplifies the existing position, where there are two bodies, the EU and the EC, by providing that there will just be one body—the European Union. We believe that that will enable it to operate more effectively internationally and will help to make the actions with regard to third countries and organisations more coherent.
	My noble friend Lord Tomlinson has already read out Declaration 24, which expressly says that the treaty will not create any new powers for the European Union. As the noble Lord, Lord Maclennan, and others have said, the EU Select Committee of your Lordships' House made it clear in its impact assessment that:
	"The Lisbon Treaty confers legal personality expressly on the EU, giving it the capacity to enter into legal relationships with other parties in its own right".
	It goes on to say that the European Community expressly and the European Union implicitly have had legal personality before.
	The noble Lord, Lord Howell, asked whether the legal personality would somehow allow the European Union to become a member of the Security Council or be more involved in it. The answer is no. As I have indicated, a vast range of international organisations have legal personality but none of them can join the UN, let alone the Security Council. As noble Lords who are more familiar with this subject will know, under the UN charter, membership of the UN and of the Security Council is open only to states, so the only way in which the European Union could join the Security Council would be by amending the UN charter itself.
	Noble Lords have asked what this means for the high representative. The noble Lord, Lord Kerr, indicated that the noble Lord, Lord Howell, had asked the right question. As the noble Lord, Lord Kerr, said, the high representative will take over the role of the rotating presidency in negotiating, where mandated by the Council, in the area of common foreign and security policy. It is for the Council of Ministers to mandate the negotiation of such agreements and to conclude them. In the area of common foreign and security policy, that would be by unanimity within the Council. We have already discussed that at some length in Committee with regard to the relationship between the high representative and the Council.
	On parliamentary control of treaties, the position will be exactly the same as at present: where the EU, rather than the UK, is a party, the decisions are subject to parliamentary scrutiny in the usual way that has applied for many years. There is no change on that. As with all international organisations with legal personality, the EU can act only within the limits of the powers conferred on it by the treaties.
	Because this is, one could argue, a way of tidying up and making it easier to conclude agreements with other organisations and states beyond the European Union, we see no reason to lay a report about this before your Lordships' House or another place. We think that this is an important way of ensuring that the treaty deals with outstanding issues where business could perhaps be transacted better by taking us forward into a single legal personality, but it is nothing more than that. It is an important step, and one that I hope noble Lords will support. I hope that the noble Lord will withdraw his amendment.

Lord Howell of Guildford: I am grateful to the Minister for her reply. Quite a lot in this brief debate has turned on the remarkable and voluminous work of the European Union Committee. The chairman of that committee does a splendid and superb job, but not even he would claim that every word of every report was the gospel truth that shall not be gainsaid or questioned. Like all bibles, it is capable of a certain amount of interpretation in rival ways.
	I notice that the noble Lord, Lord Maclennan, was quoting great legal authorities giving views in one direction, but there are views in another. Mr Neil O'Brien has pointed out that the Government have traditionally resisted the conferral of a legal personality on the Union. The Minister tried to explain why, but there are some big gaps. It was not only traditionally resisted; the Prime Minister said that the Government were not having it and that the idea of EU legal personality would not be accepted and had been stopped. Of course, in the end, it had not been stopped.
	If the whole parliamentary system is going to work properly within the European Union context, we need to know the reasons when there is any change of gear. That seems to be missing, even from some of the reports submitted to your Lordships' House and the other place. Is it not our role to ask why? Is ours not to reason why? Listening to this debate—

Lord Roper: If the noble Lord looks at the paragraph which quotes Mr Neil O'Brien and makes precisely that point, he will see that we then asked the Minister for Europe why the Government had changed their mind. In paragraph 2.49 the Minister gave us exactly the reply to the point made by Mr O'Brien. It is important to see that the committee followed up the point which the noble Lord is raising, and we believe that we got a satisfactory reply from the Government.

Lord Howell of Guildford: The Minister gave the noble Lord and other members of the committee a counter-assertion, which was that, "It is all okay now because we think JHA and CFSP are protected". That is not a grown-up or fully mature argument to present to the Houses of Parliament. There are deeper and more important reasons, which I would like to hear. We are not going to hear about them now, I realise. All I ask of the Government at the end of this short debate, and I shall probably ask it at the end of others, is please do not tell us that nothing has changed when it clearly has. In the excellent EU report, the last, quite long, sentence of paragraph 2.58 begins:
	"Conferring legal personality expressly on the Union".
	I will not read it all out, but it points out that it will apply to the EU and the areas currently covered by the Second and Third Pillars. That may have nothing to do with competence. It may not change even the underlying pattern of behaviour—although who is to know, when the whole process is step by step, over the years, and one thing grows from another—but it is a change. So please do not tell us that nothing has changed when it has. In the same way, over the whole constitution and the word-for-word translation of it, please do not tell us that something has changed when it has not. If we follow those two precepts, we will get on a lot quicker with processing this Bill. I have finished, but I think the noble Lord wants to speak.

Lord Maclennan of Rogart: I am grateful to the noble Lord for giving way. No one was asserting that nothing had changed. We were asserting—and the committee asserted—that there was de facto legal personality in respect of matters that did not fall within the European Community treaty. The change that has taken place is from de facto to de jure. That is the only change of any import. We are not being as fundamentalist as is implied by the final statement of the noble Lord.

Lord Howell of Guildford: I said as much in my opening remarks, although I live in a world where de facto may be what we face but de jure still matters. What is the law and what is going to be the law still matters in this country, as far as I know. We do not live in a totally relativist world where all legal absolutes can be cast aside in favour of the immediate de facto situation. Having said all that, as I was about to say before the noble Lord stood up, in light of this frankly rather unsatisfactory but interesting exchange, I believe that we should return to these matters and not let them rest. For the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 26A not moved.]

Baroness Gibson of Market Rasen: We come to Amendment No. 27, to be moved by the noble Lord, Lord Willoughby de Broke.

Lord Pearson of Rannoch: moved Amendment No. 27:
	Clause 2, page 1, line 12, after "excluding" insert—
	"(i) Article 1, paragraph 58, inserting a new Article 49A TEU, relating to withdrawal from the Union; and(ii) "

Lord Pearson of Rannoch: It is the fluffy end of the lollipop—Lord Pearson of Rannoch. My noble friends and I tabled this amendment to cancel the new arrangements in the treaty for a country to withdraw from the European Union. Our reason for doing so is that the new procedure appears to make it more difficult to leave the EU than at present.

Noble Lords: Oh!

Lord Pearson of Rannoch: I am glad that I amuse the noble Lord, Lord Wallace, and his colleagues.
	To us this new clause in the Lisbon treaty is not the democratic and helpful advance claimed by Europhiles generally. At the moment all that is necessary to leave the European Union is for Parliament—the House of Commons and your Lordships' House—to repeal the European Communities Act 1972, thus also repealing all the subsequent treaties which have been passed since as amendments to it. That is simple and highly desirable. I should be grateful to know if the noble Baroness the Leader of the House disagrees with that analysis. If we want to get out now, all we do is repeal the 1972 Act and we are out. But if we are forced to follow the arrangements set out in Lisbon, we have to go through a rigmarole lasting up to two years and we would be able to leave only on conditions agreed with the Council whose meetings about our withdrawal we would not have been able to attend. I call that much less satisfactory and much less convenient, and that is why we want to remove it.
	I have only one question for the noble Baroness the Leader of the House: if we ratify Lisbon, just how binding will the new arrangements be? I appreciate that we like respecting our treaty obligations and all that, but surely if Parliament decided that the UK should leave all it would still have to do is what it has to do now, which is to repeal the 1972 Act. Since the Government have agreed in these proceedings that one Parliament cannot bind its successors—and I ask the noble Baroness to reconfirm that briefly and clearly—surely a simple cancellation of the 1972 Act, and subsequent and depending Acts, would do the trick and set us free. What is the new position? I beg to move.

Lord Wallace of Saltaire: There is clearly no pleasing some Eurosceptic Members of your Lordships' House. It was for many years a staple in the Eurosceptic documents I used to read from time to time as a painful duty that there was no mechanism provided for leaving the European Union. We all understood that one could leave it and that there was no way of stopping a sovereign state from doing so, but to clarify this some thought it would be a good idea to put this explicitly into the text. Having been presented with a gift horse, the noble Lord, Lord Pearson of Rannoch, as always, has looked in great detail at the back of its mouth and discovered a number of teeth with which he is not at all satisfied.
	We are on the fourth day in Committee on this Bill and we need to make progress. The characteristic search of our Eurosceptic colleagues for some statement or document which suggests malign intent or even conspiratorial purpose sometimes stretches the indulgence of the Committee.
	Following the previous Committee day I searched Google for the Farnborough agreement 2000. When I entered "Farnborough agreement 2000", the top three most-cited responses were: an agreement between the Ministry of Defence and Farnborough aerodrome; an agreement with Farnborough local authority on environmental management; and an agreement which the Farnborough football club had made with a Canterbury company for the distribution of a newly designed football shirt. The Farnborough agreement between defence ministries has not enormously grabbed the public's attention, which perhaps makes it a little less than the issue of central importance which the noble Lord, Lord Pearson, suggests it is.
	We recognise that Mr Prodi has been a gift to our Eurosceptic colleagues, partly because he has such an unfortunately loose manner of expressing himself. He is not one of the most talented of European leaders. We also recognise that unnamed officials quoted by the Daily Telegraph—or an unnamed French official quoted by Le Figaro, as the noble Lord, Lord Pearson of Rannoch, was suggesting the other day—are not always the most reliable, particularly when we cannot discover who they were or whether they even existed.
	This claim to uncover a secret understanding behind the false consensus of normal political discourse, which we keep hearing again and again on different amendments, seems a little—

Lord Pearson of Rannoch: If the noble Lord wishes to accelerate our proceedings, would it not be more reasonable to confine defence matters to our defence debates and perhaps bring this up on Report?

Lord Wallace of Saltaire: If I may finish my point, I am attempting to accelerate. I was merely complimenting the noble Lord, Lord Pearson, on his familiarity with the neoconservative approaches of the United States in which the followers of Leo Strauss claim to have a secret knowledge that is much clearer than the understanding of the masses. Last time round, the noble Lords, Lord Blackwell and Lord Pearson of Rannoch, insisted that they knew better than the former Secretary-General of NATO what the European members of NATO felt—although I was happy to see, just as we reached 11 o'clock, that the noble Lord, Lord Pearson of Rannoch, admitted his underlying hostility to France and Germany. If I understood what he was saying and what the noble Lord, Lord Stoddart, was saying, they are not anti-European, they just do not like these wily continentals.

Lord Lamont of Lerwick: Will the noble Lord bear in mind what the Leader of the House said about impugning integrity? If, as we accept, it is thought out of order and inappropriate to say that a committee has too many members with pro-European opinions, surely the tone of the noble Lord's comments also is inappropriate.

Lord Wallace of Saltaire: I refer the noble Lord to col. 551 of the Committee's last sitting on the Bill.

Lord Stoddart of Swindon: I take grave exception to the noble Lord's attitude to those who might have a different point of view from his own. People such as myself—and I meet a lot of people like myself—do not disagree with these "wily continentals". Our view probably is that the really wily people are the Liberal Democrats.

Lord Wallace of Saltaire: I certainly do not wish to prolong this. I simply make a brief call for a larger grouping of the amendments that we have to consider in the next three days. I note that my Conservative colleagues have been extremely generous in grouping amendments. UKIP members have been a good deal less generous. We had on our last Committee day a constructive debate on the defence dimension of this treaty. I hope that later today we will get on to a constructive debate on the justice and home affairs dimension of the treaty. It is towards that which I insist the Committee should be moving towards.

Lord Willoughby de Broke: My name is added to this amendment, to which I shall speak briefly. I do not think that the noble Lord, Lord Wallace, said a single word about the amendment—he went off slagging off Eurosceptics and talking about conspiracy theories that people may or may not have. Perhaps I may draw his attention back to the amendment, which concerns the withdrawal provisions in the treaty. Speaking for UKIP, as my noble friend Lord Pearson did, I can say that we are at one with the Government on this. I say that because, a few years ago, the former Foreign Office Minister, the noble and learned Baroness, Lady Scotland, stated our position exactly. In January 2000, she said:
	"We see no need for the Treaties governing membership of the Union to include a specific provision on unilateral withdrawal. It remains open to Parliament to repeal the European Communities Act 1972, the logical consequences of which would be to withdraw from the EU. The terms of such a withdrawal would be for the Government to negotiate with the other member states ".—[Official Report, 11/1/00; col. WA 96-97.]
	That is the UKIP position, and I am very happy that it is the Government's position as well; or it was the Government's position. One of the first things that we should negotiate is to tell our ex-fellow members that we are no longer sending them a cheque from the British taxpayer of £14 billion a year.

Lord Stoddart of Swindon: Since my name is added to the amendment, I must say a few words in support of it. The reason why I support it is that the treaty appears to put a constraint on our ability to withdraw by repealing the European Communities Act 1972 as and when we wish to, without any constraint by the European Union and its institutions. I would like to have the assurance that once Parliament has repealed the European Communities Act 1972, that is the end of it. There may be further negotiations with the EU, but they would be on our terms and not on its terms.

Lord Hannay of Chiswick: I will just say a brief word on this really rather astonishing debate, without seeking to impugn anyone's character. I find the amendment mischievous, because the European Union is in fact doing what I think noble Lords opposite wished it to do, which is to systematise the possibility for a member state to leave if it wished and decided so to do. The doctrine that the noble Lord, Lord Pearson, is adumbrating is the doctrine of unilateralism in regard to international obligations. You enter into them when you feel like it, you tear them up when you feel like it and you tell everyone else to go to hell when you feel like it. I do not happen to think that is a very good way of running international affairs, whether in the European Union or anywhere else, and I hope that the amendment will be withdrawn, because it is totally mischievous.

Baroness Ashton of Upholland: I was smiling to myself when the noble Lord, Lord Willoughby de Broke, said "slagging off", because I used the word "impugn" when I was trying to think of a posh word for slagging off. That is what I came up with, with the help of my noble friend Lord Bach. I apologise for smiling when that was said. I love the idea of the noble Lord, Lord Pearson of Rannoch, being the fluffy end of the debate.
	I will try to be brief, because I think that everything that needs to be said has been said. The first time that we have the opportunity to consider as a group of 27 states the possibility that a member state might wish to leave is through the Lisbon treaty. It is right and proper that rules to enable people to leave should be properly considered in the treaty and delivered appropriately. The noble Lord, Lord Stoddard, is not completely right in saying that repealing the 1972 Act is all that has to happen. That is true for domestic law but, as a consequence of being part of the European Union, we have entered into treaty agreements of many different kinds from which we would also have to withdraw. We would have to do so in a way that did not detrimentally affect our national interests. We need to consider that.
	The decision to leave the European Union is for the member state and the member state alone. It is its decision to do so. There is no question of seeking permission to withdraw, which noble Lords might have been concerned about. It is simply about notifying that the member state has decided to withdraw. The European Council would provide guidelines for withdrawal, and the Union would negotiate an agreement with the withdrawing member state because, as noble Lords will be aware, there are issues to be resolved beyond treaties, such as what happens about arrangements for Members of the European Parliament from nation states, for officials in the Union institutions from the withdrawing member states and so on. There are people who would need to be considered in that process. Making sure that was done properly and in an orderly fashion is important.
	There may be financial implications, as noble Lords have said, of not contributing to the European Union. Equally, there might be financial considerations of other kinds. It is important to have a mechanism that could ensure smooth withdrawal. Noble Lords can be reassured that the decision would be for the member state. In our case, the repealing of the 1972 Act would be the domestic way in which we would do it, but there would be much more to do. This sets out a process to make that happen as smoothly as possible. I hope that we would never leave the European Union, but—as I hope noble Lords will agree—if a member state chose to leave, this is a very good way of making sure that it happened properly.

Lord Pearson of Rannoch: It might be, or it might not be—I think that the noble Baroness has just said that it would be for the elected Government of the day to decide. I am grateful for the rest of her reply—it is very helpful to have that on the record. In the 15th minute of this debate, which I think is near to setting a record in our proceedings, I feel that I should say to the noble Lord, Lord Wallace, who entered into a debate about defence, that in our most recent proceedings, I merely queried the present status of the Farnborough agreement. I named the countries involved, I named some of the provisions and I asked what its present status was—no more than that. It is not a fairy tale—the noble Lord even found it on Google.
	I say to the Liberal Democrats, who have not tabled any amendments, that their lengthy interventions are prolonging our proceedings and are slightly naughty. I trust that they will do better in future and I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 28 had been withdrawn from the Marshalled List.]

Lord Howell of Guildford: moved Amendment No. 28A:
	Clause 2, page 1, line 12, after "excluding" insert—
	"(i) Article 2, paragraph 12, inserted Title I, relating to categories and areas of Union competence; and(ii) "

Lord Howell of Guildford: When I heard that we should have to look at things line by line, I did not intend that we should spend too much time examining whether or not we should leave the European Union. That is of no interest to us, and I would advise my Liberal Democrat friends to leave the matter alone if they want to get on with business.
	We want to look at the very hard and important issues that arise in the context of membership of the European Union. We turn now to what might be called, in the words of the treaty-makers, the horizontal issue of competences—that is, the defining of the division of powers between member states and the central EU authorities. I hope that, in discussing this horizontal issue, we do not drift into all the specific areas of new competences, which are listed fully in the treaty and in other documents, because we are going to debate some of those competences later on. That would be unnecessary duplication. Nevertheless, the competences issue is sitting there in the middle of the treaty, and it is an area where the UK Government used to be deeply worried—and rightly so—about creeping competences and the extension of the areas of competence. There they all are, on page 53 of the treaty—Article 2B for exclusive competences and Article 2C for shared competences, which are substantially extended. They were all in the constitution document and are replicated in this one. They are intended to clarify, but do they?
	The point of the Laeken declaration, which gave birth to the plan for a new constitution, and to the disastrous and mismanaged convention that all ended in tears, was to clarify the different layers of power, and to stop the bit-by-bit erosion of what I call the coastal rock cliffs of national interest by the ceaseless pounding sea of Brussels power—the late Lord Denning had even more emotive and evocative words to describe what he thought was happening. That was the intention behind the convention, the constitution treaty and its replica, the Lisbon treaty. However, even the most objective reader, and certainly 1,000—or 100, I must not exaggerate—different authorities throughout the European Union have had to admit that it does the opposite. This is a very confusing document. More powers are now shared. The sharing concept has come to the centre of the treaty yet no one is clear what the sharing means. The phraseology is that it allows member states to act only if the EU chooses not to do so.
	The treaty states that:
	"The Member States shall exercise their competence to the extent that the Union has not exercised its competence".
	With the best will in the world, there is a lot of room here for misunderstanding, subjective judgments, legal interpretations, analysis and argument. Certainly, clarity comes at the bottom of the list. It is no surprise that when these texts were drafted at the time of the convention for the previous treaty, the UK argued, first, that shared competence should be a residual category, but of course it is not; secondly, that the idea of an indicative list of competences and shared competences would be the "worst of all worlds", which is exactly what we have; thirdly, that competition should not be an exclusive competence, which it is; fourthly, that employment, public health and consumer protection should not be shared competences, which they turn out to be in the treaty; and so on.
	I shall not delay us any more than is necessary by listing all the new competences. They are extensive and go into areas that were vigorously opposed by the Government, yet there has been a change of heart without any reasonable explanation so far. I hope that we will now hear one. All this badly needs to be clarified. I beg to move.

Lord Blackwell: I support my noble friend's concerns on the definition of competences in this treaty. It is one of those issues whereby those who seek in our debates to minimise the impact of these treaties will say, "Here you have things listed in black and white that limit the powers of the European Union, and therefore that must be a constraining thing". Others will look at the same text and say, "Actually it is enabling of the European Union, because it is sufficiently ambiguous and vague to allow huge extensions of the role of the EU". We will hear both arguments about this use of language.
	In my view, the definition of shared competences was, in the words read out by my noble friend, that the EU can legislate in any area where there is a shared competence with unlimited scope. Once the heading is there—and he did not quote an exhaustive list—the treaty prescribes that, as long as the EU can make some tangential reference to the matter in hand as being related to one of the headings, the EU can claim the competence to legislate in that area. We know that as a result of the extensions that the treaty brings in, the EU will have a right in most of those areas to legislate by qualified majority voting. Therefore, these provisions open up almost any area in which the EU might want to legislate as being accessible to it through an extension of these so-called shared competences.
	It is notable that the wording of the treaty states that national Governments can—it does not include the word "only", but it might as well do so—legislate in areas where the EU has not legislated. In other words, we have given the EU the first right to legislate in all these areas. Our national Governments are allowed scope to legislate only in areas where the European Union has not legislated. If those were only a few tight areas related to the working of the Common Market or trade policy, one might think that that was reasonable, but when the headings are as broad as they are, covering just about every conceivable area of domestic policy—whether economic, social, political, environmental, or on justice and home affairs—you realise that we are creating a European Union that has carte blanche to legislate in all those areas. The few areas that were not thought of to be included under those headings are then put in another category of supporting legislation, whereby the EU can act to support or complement the laws of nation states. It does not take too much insight to understand that most of these areas will rapidly be turned into areas where the support and complementarity of the European Union is also becoming a major driving force for legislation.
	There is a genuine concern that this aspect of the treaty gives the European Union carte blanche. It is a significant innovation and needs further explanation.

Lord Williamson of Horton: I recall that I made a declaration of interest when we began Committee, many years ago, it seems. We come now to the proposed inclusion in the treaty of categories and areas of Union competence, and I certainly do not support the amendment to exclude that from the Bill.
	Surely it is right, and overdue, to make the competences clear in the treaty. I must say that, over a long career, I have never read a plain sentence that opponents of the treaty have found clear. I have found the competences very clear and some have always maintained that they are not. These elements in the Bill are perfectly clear and I think that the actions taken by member states and the European institutions over a long period—at least 35 years, and before our membership—have made them clear. If, 20 years ago, I had been asked to write the exclusive, shared and supporting competences of the Union I would have written them in terms identical with those in the treaty, other than the addition of one or two points that I understand, such as energy and so on. Over 20 years, they are exactly what I have understood to be the shared and exclusive competences and supporting actions of the European Union. Those who have read the innumerable booklets, pamphlets, books and other things written about the European Union would have found them there very many times. We are now putting them in the treaty because there is a spirit of greater transparency, and I think it is reasonable to put them in for that purpose.
	We see a small number of exclusive competences, and most people are very surprised by that. There are a larger number of genuine shared competences, but in some of the areas the Community acts—and we want it to act—so its role is bigger, and there are a large number of areas where the Union can support member states' national action. That is the pattern we have been working on throughout our membership of the Union. If it has not been fully understood before, perhaps it is a good thing if we put it in the treaty now.

Lord Dykes: I thank the noble Lord, Lord Williamson, once again for putting the whole matter in historical perspective. It is nothing to be frightened of and therefore I was rather surprised by the anxieties expressed by both the representative of UKIP and the mover of the amendment.
	I suppose that there is an understandable anxiety about the inevitably complex appearance of legalistic language, when treaties are drafted, of the relationship between individual member states and the Union itself. This is a codification exercise that is bound to be progressive. If you consult carefully the leading representatives of the 10 member states that have joined recently—and the two others following them, including the two Mediterranean islands, of course—you will notice an enthusiasm always expressed by them for the fact that, as the Union is becoming bigger, allocation of competence, power and duty at the margin is bound to be increased to make the whole thing capable of going forward. If you do not do that, it would stall. The new member states wanted that when they signed up to the treaties and the acquis communautaire.
	Once again, if you are an enthusiastic member of the club, the old example of that is that you have to occasionally do what the other member states say. In fact, I distinctly remember a former senior Minister of the Conservative Government, the noble Lord, Lord Lamont, actually saying that in the House of Commons many years ago. It was quite a surprise to hear him say that, and I was very pleased at the time. It is a reality that we have to accept.
	The anxieties of the Conservative spokesman and the succeeding speaker, supporting Amendment No. 28A, would have been more justified if there had been any increase in the exclusive competences. As the noble Lord, Lord Williamson, rightly said, they are very brief. Of course, they cover major areas of collective endeavour—I certainly would not deny that. Nonetheless, it is a very short and modest list that we have all tended to accept, with the exception of monetary union in this country of course—and I regard it as a great pity that we have not yet joined what is rapidly developing as the most successful currency in the world, at least for the moment. It may not always be like that but it is obviously an impressive currency in international terms.
	However, with regard to the other matters, the list of exclusive competences does not create anxiety at all. It includes the customs union under Article 19 of the treaty of Rome 1957, and the competition rules, which I am sure most Members of this House would support. The only way in which there can be a completely free market with an open competition policy is for the Commission to have an exclusive competence to decide that in a European-wide sense, while not in any way infringing on the right of the member states to have their own national competition procedures and frameworks. The list also includes monetary policy, to which I have just referred. We are not yet members of that; we are part members of part of the consultative process but I hope that one day we will be full members. Although this may sound more unusual and esoteric, the list also includes the conservation of marine and biological resources. Perhaps that will be referred to later when we discuss common fisheries policy. One can see that that issue had to be exclusive because the conservation measures could operate only on sea areas that were wider than one member state's ownership. Also included are the common commercial policy under Articles 110 to 116 of the treaty of Rome 1957, and the international agreements whereby it has been agreed that in future the Union can sign on behalf of all members.
	The areas of shared competence and supporting competence are more interesting from the point of view of those who have reservations or are not such enthusiastic Europeans as most members of the Liberal Democrat party in this House and, I hope, the other place. However, again, here the treaty simply sets out rationally the relationship between the Union and the nation states making up membership of the Union where those nation states, in free discussion in the Council of Ministers and the European Council, and by signing treaties on previous occasions, have agreed in a sovereign way that they are prepared to let the Union have some of that competence. Therefore, we on these Benches cannot understand the anxieties, and we hope that the amendment will not be pressed.

Lord Stoddart of Swindon: I have been listening to the Leader of the House and will take only two or three minutes. I want to express some sympathy with the point made by the noble Lord, Lord Williamson, but it would be nice if we could table amendments to the treaty itself. Unfortunately, our procedures do not allow us to do that and therefore we can only amend this short Bill. That is why those of us who want to make amendments have to say, "Okay, you can have the treaty except this". I agree that that is not a satisfactory way to proceed.
	I have just one question for the noble Baroness the Leader of the House. Up until now, replies to Written and Oral Questions have stated that about 70 per cent of our legislation emanates from Brussels. Will that figure increase—or perhaps even decrease—as a result of this treaty? Some of us believe that the European Union is doing far too much. If this treaty is to increase the percentage of legislation that comes from Europe, rather than decrease it or leave it as it is, one begins to wonder what on earth this Parliament is here for. Why do we need 649—I think that is the figure; it goes up and down—Members of the House of Commons and why do we need 750 people in this place if the European Union is responsible for at least starting the legislation and powers which we then have to enact?

Lord Kerr of Kinlochard: I wonder whether I can help the noble Lord. With respect, the important question that he addresses is not actually relevant to the articles of the treaty on which these amendments focus. If the noble Lord looks at article 2A, paragraph 6 states:
	"The scope ... and arrangements for exercising the Union's competences shall be determined by the provisions of the Treaties relating to each area".
	That is why the noble Lord, Lord Howell, said quite correctly that he did not intend to focus on the definitions in each case because we will come to debate them in subsequent amendments; he was concerned simply with these broad categories at the start. The proportion, amount and focus of legislation will not be affected by these articles, which are headline articles that describe categories of competence but do not affect the content of competence at all.

Lord Stoddart of Swindon: That was the question I was asking the Minister. I appreciate what the noble Lord says; his intervention is very helpful, but because I wanted to save time I had not entered into the specifics of the competences. All I wanted to know was whether this treaty would increase the percentage of legislation coming from Brussels—a simple question, to which I hope to have a simple answer.

Baroness Ashton of Upholland: I am grateful to the noble Lord, Lord Stoddart. I did not see him stand up; I was not trying to cut him off in his prime from our discussions.
	The categorisation of competences does not do anything new. The Committee will be aware of exclusive and shared competences, and areas where the EU can "support, co-ordinate or supplement" national actions. No change of substance is being proposed here; the categories reflect existing case law and, I believe, provide greater clarity than we have had before. The Select Committee said:
	"We consider that setting out the categories and ... listing ... areas of competence is a useful clarification".
	I hope that all noble Lords will agree with that quite important point.
	It is also explicit in the Lisbon treaty that powers are given to the European Union by its member states, not the other way round. Again, it is important to clarify that that is how this works. It sets out exactly where the European Union has a power to act and in what way, and that it has only those competences expressly conferred on it by the treaties. I would describe that as making it absolutely clear that the member states are, importantly, in control of the treaties—"masters of the treaties" is how the German constitutional court put it.
	Another important clarification is that the treaty also specifically recognises that competences can be transferred back to member states. If it is better that one be taken away from the European Union and go back to member states, that can now happen. It is important to recognise that, as Chancellor Merkel said, it is no longer a one-way street; that is absolutely right when there is the ability for things to be returned. Also, in the area of shared competence, if the Union ceases to exercise its competence it reverts back to the member states.
	First, then, this is a clarification of what is exclusive and shared, and where the EU is acting to support member states. It is important to say that that is the extent of what the European Union can do, that competencies can be returned to member states and that those are conferred on the Union by member states. I should have thought that all noble Lords would welcome those important points of clarification.

Lord Pearson of Rannoch: Can the Minister help us a little by answering some questions? First, have any powers been returned to nation states since 1972 and, if so, can she identify them? Does she agree that the word competence is very unfortunate, because competence usually means an ability to do something and to do it well? We have come to use the French word "competence", which means power, so perhaps we should use the word "power" in future when we discuss these matters.
	What will be the procedure for returning those powers in future, which I maintain have never been returned in the past? Will that be by qualified majority voting or unanimity? Supposing that the other member states do not want to return powers that we might want returned, how will that work?

Baroness Ashton of Upholland: I have never known the word competence to have had such an emotive response from the noble Lord. Competence is a word that, as I understand it, has a legal meaning; that is why it is used. Words in the European Union often have meanings that are understood across all member states. I do not know of any powers that have been returned; the noble Lord may well be quite right. If I can get the answer to that now, I certainly will.
	I do not know what procedure would be used, because that has not has yet been determined. My point was different; it was to say that the treaty recognises the possibility that powers could be returned. That of itself is novel and not to be underestimated as a potentially important aspect of thinking about the role of the European Union now and in future. As noble Lords have said, we are not going to get into the detail of what those competencies would be today. If noble Lords read the evidence given to the Select Committee by my honourable friend Jim Murphy, they will see set out the areas of difference in competences relevant within the Lisbon treaty; for example on sport, which is new; on space, which noble Lords have mentioned; on energy, tourism and so on.
	When, as we will, we come to debate the issues raised in some of the amendments about specific policy areas, we may as part of that deal with the competences in the treaty. My point on this amendment is simply to say that we believe that categorisation is positive, that it is important to list the competences to understand the limits and parameters of the role of the EU and, as I said, to recognise that this is power—if the noble Lord wishes to use that word—conferred on the European Union by member states, not the other way round. I can confirm to him that no powers have been returned thus far.

Lord Stoddart of Swindon: The noble Baroness says that in the treaty there is the opportunity to get powers returned, but that has been the position since 1992, when John Major was Prime Minister and negotiated the subsidiarity clause. He came back to this country and declared, "Game, set and match", because he had got that introduced into the Maastricht treaty. Since then, no powers or competences have been returned to this country at all, as the noble Baroness has just confirmed.

Lord Pearson of Rannoch: Does my noble friend remember that Mr Major said that 25 per cent of all EU legislation was going to be repatriated to member states as a result of his brilliant negotiating skills at Maastricht? The noble Baroness has just confirmed that not one such power has since been returned.
	Finally, I put this to the noble Baroness. She says that these powers are conferred by treaty on the European Union by the nation states. If she cannot tell us how those powers are eventually to be returned, and if no powers ever have been returned, does this not confirm that we are dealing with a one-way ratchet? We are dealing with the acquis communautaire. The treaties, the protocol on subsidiarity and all the rest confirm that once a power has been passed, it cannot be given back without unanimity in the Council, which is unrealistic. I do not think that it helps to say that these are merely conferred powers.

Baroness Ashton of Upholland: The noble Lord is not going to agree with me on this, but he is right to say that you would have powers returned by unanimity, except in some areas of shared conpetence where, if the EU does not act, qualified majority voting might apply. As we move forward with the European Union of 27 member states, and begin to think about how it is going to operate in the future, one of the interesting points in the treaty is the recognition—whether or not it has been recognised before—that powers could be returned if that were most appropriate. I should have thought that the noble Lord would welcome that.

Lord Stoddart of Swindon: Those were two interventions on my speech, but I have finished anyway.

Lord Howell of Guildford: I am grateful to the noble Baroness for summing up the position as she sees it. There is an important thought here that we always plunge into the jargon of these treaties and of the law. It appears that here too we are to some extent in the hands of the lawyers and forget that there is a vast world outside that probably has little clue what we are talking about.
	My mind has been set to the question of what competence really means. It is defined in the 10th EU Committee report, where there is an excellent piece on the whole issue of competences which answers most of the questions. It is clear that competence defines certain areas in which the EU institutions have conferred on them by member states the powers—if they were to use them and if the processes, whether vetoed, unanimous procedures or procedures that could not be vetoed, were launched—to make laws and regulations and interest themselves in these areas. I notice that in the excellent report from our committee, Professor Chalmers said that there was,
	"nothing in the Lisbon treaty which would prevent or limit the European Court of Justice from extending competences from the base established by the Lisbon Treaty".
	We are on the edge of a very fuzzy, permeable line. It is right that, as parliamentarians, we should seek to get a little more precision into the limits which ought to circumscribe the use of power by those who hold it.
	Beyond that, I was pleased to hear the noble Baroness talk about the provisions for transferring back certain competences. She was asked which competences. She did not immediately have an answer from the past and, by definition, we obviously do not have an answer from the future yet. But that is the spirit. That is what many of us have been asking for all along—let us look in the 21st century at all the powers that piled up in the EU institutions during the 20th century. Let us re-examine them and see those that need unravelling, the acquis that needs unscrambling and the possibilities of decentralisation in an age of decentralisation, the reassertion of the democratic national parliaments as the anchor elements in the entire structure of the European Union. Let us look at those things, work on them and make suggestions about them.
	None of these ideas seems to have come forward in the past few years—whether at the Hampton Court summit, which was supposed to be the great opportunity, or at other summits. However, it pleases me to hear this language raised. I am so pleased that, as long as my pleasure lasts, which may not be very long, beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hunt of Wirral: moved Amendment No. 29A:
	Clause 2, page 1, line 12, after "excluding" insert—
	"(i) Article 2, paragraph 12, inserted Article 2B TEC (TFEU), paragraph 1(b) providing for the establishing of competition rules necessary for the functioning of the internal market to be an area of exclusive competence of the European Union, unless arrangements have been made for the Secretary of State to report to Parliament each year on the operation and application of European Union competition policy according to the principle set out in the Protocol on the Internal Market and Competition; and(ii) "

Lord Hunt of Wirral: I thought that it might be helpful to the Committee if, instead of moving a range of separate amendments all dealing with some aspects of the economic issues to which the Bill gives rise, I brought my 10 amendments together and spoke to them in the same group. I hope that that will be useful. In my zeal to do so, however, I should point out that the group includes Amendment No. 80, which unfortunately it should not, so I shall not speak to it. If other noble Lords agree, I will endeavour to do so later.
	Amendments Nos. 29A and 29B are not wrecking amendments but follow very closely the arguments that were pursued in the other place, in particular those of Philip Hammond and Vince Cable on the alteration of the wording on competition. Amendment No. 32A deals with the internal market. We have the benefit of a European Union Select Committee report, The Single Market: Wallflower or Dancing Partner?, to which I shall refer in a moment. Amendment No. 39 deals with customs co-operation; Amendments Nos. 62 to 64 deal with state aid, competition and warnings on economic policy; Amendment No. 71 deals with common commercial policy; Amendment No. 72 deals with intellectual property and foreign direct investment; and Amendment No. 163 refers back to Amendments Nos. 29A and 29B.
	I recall that, back in 2000, the Lisbon strategy set out its aim of making the European Union,
	"the most dynamic and competitive knowledge-based economy in the world ... by 2010",
	so it is a good moment to work out where we are today and what this treaty will do in taking us to that goal. I regret to say that, as we look across the European Union today, we find a shaky, diverse economy. The nation states in the eurozone, which are forced to have the same interest rates, are suffering to varying degrees from that situation. The Minister may seek to persuade us otherwise, but an immediate case cannot be evolved for the management of the economy to move to Brussels. Certainly so far as the treaty is concerned, there are signs that the nations that agreed to the treaty have decided to move in that direction.
	What do I mean? I am talking about free trade and open markets. I have always regarded those markets as crucial to creating an outward-looking Europe that can compete on the global economic world stage. It is sad that, in the treaty, there is so little about the single market and helping us to achieve those open markets. There is plenty in the treaty about EU values, but nothing about what was, after all, a founding principle of the European Union.
	In evidence to the European Union Select Committee, John Hutton admitted in his written submission on 17 December last year:
	"The Reform Treaty does not change arrangements for the internal market in any significant way".
	Let us ask the Government why, at such a crucial moment, there is no significant change. There was one significant change, which is known as the Sarkozy clause. The one good thing in the treaty—the clause allowing free and undistorted competition—was struck out as a result of Monsieur Sarkozy's intervention. After his success, he commented:
	"Competition is now just a means, not an end in itself. This opens the way to a different jurisprudence, one that favours European champions and brings a true industrial policy".
	He said:
	"We have obtained a major reorientation of the objectives of the Union".
	He went on:
	"Competition is no longer an EU objective or an end in itself ... The word 'protection' is no longer taboo".
	I hope that the Minister will explain why the Government agreed to that deletion. Peter Mandelson has already responded in strong terms. He said:
	"Competition is how we keep our markets efficient and dynamic; keep prices low for the consumers and maintain innovation. Competition is a source of creativity. Without it, our economies would stagnate".
	I agree with Mr Mandelson, but why don't the Government?
	Why are the objectives of full employment and social progress now going to have a higher legal status under European law than free competition? What has caused the Government to agree to this move? We need to know. I recall Commissioner Mario Monti, seen as one of the great prophets of competition, responding:
	"If this goes through, it's the first step towards disintegration".
	He continued:
	"I am deeply surprised that the British are allowing this to happen".
	Well, so I am and I think that the Minister has to give us an explanation.
	I read in the press at the time that our Prime Minister, Gordon Brown, had "hit the roof" when he heard about the concession on the Sarkozy clause. The Sunday Times said that the Prime Minister "went ballistic" when he heard. From the plethora of memoirs at the moment, we are led to believe that that is a frequent occurrence. However, I am particularly concerned about this instance. If the Minister is going to tell us that very little has changed, why did the Prime Minister go ballistic?
	There is so much else that I could deal with, but I want to try to conclude my remarks. However, I will say that, on this occasion, I am looking for support from my noble friend Lord Dykes, as much of what I have said was echoed in the other place by Vince Cable, who said that,
	"the concession made by the British Government ... is rather damaging ... the concession represents a step backwards in political terms, and that is why we have tabled some amendments to ensure that that aspect of the treaty is monitored as it proceeds".
	Sadly, his colleagues in this House did not table amendments. However, I have and these are those amendments. Vince Cable continued:
	"There was a retreat from the commitment in the treaty from an undistorted internal market".—[Official Report, Commons, 6/2/08; cols. 1003-08.]
	I look forward to hearing whether my noble friend Lord Dykes will support Vince Cable's amendment. I am particularly attracted by Amendment No. 29B, which is not a wrecking amendment but merely states that the Secretary of State shall lay,
	"before each House of Parliament a report setting out the arrangements under the Treaty for securing an open market economy and requiring free and undistorted competition throughout the European Union".
	What could be less wrecking than that? All it requires is for the Government to focus on what they have done—or is it what they have not done? Perhaps they should have focused a little bit more on the effect of what has happened in the treaty.
	The protocol, no doubt the Minister will say, should do much to reassure us. However, there has already been extensive debate in this House about the difference between what is in the protocol and what is in the treaty. I am concerned about the changes that have taken place. I hope that the Minister will explain why she supports them.
	We also have the report of our European Union Committee on the single market. Much of what it says is very worrying. On page 19, paragraph 59 states:
	"We believe that the Single Market has great potential to deliver benefits to consumers and businesses, and yet, despite its impressive record, its future appears at risk. We are concerned that the momentum behind the Single Market has been weakened. We therefore call on the Government and the Commission to instil a sense of urgency into the review of the Single Market".
	On page 20, paragraph 71 continues:
	"The Minister for Europe assured the Committee that the removal of the words free and undistorted competition from the text of the Reform Treaty had not led, and would not lead, to a change in policy ... We call for a renewed commitment to the importance of competition and the need to complete the Single Market for the benefit of consumers and businesses alike".
	We also need to hear from the Government about the effect on customs co-operation, state aid and common commercial policy. How will this affect our ability to continue to secure for our Commonwealth partners their rightful historic concessions? Over the years, these have slowly diminished in their effect, but they are still vital. We need to know what the Government will do under the new provisions to continue to secure them.
	On Amendment No. 64, can the Government say who is going to define the warnings on economic policy? Who is going to be the arbiter? Who is going to set the benchmark against which nations will be judged? No doubt the Minister will seek to reassure us on intellectual property and foreign direct investment, too.
	I hope that the Minister is happy that I should have brought together so many amendments in one debate. I hope that she will be able to respond to all the questions that I have raised and to all the amendments. I beg to move.

Lord Lamont of Lerwick: I support what my noble friend on the Front Bench has said. The Sarkozy amendment was widely seen as a strange development and all the more odd because the British Government appeared to go along with it. It was not only Peter Mandelson who spoke out against it; my noble friend Lord Brittan—with whom I do not always agree on European affairs, although he is a good friend of mine—also spoke out strongly against this change being allowed. It was also roundly and firmly condemned by the Financial Times, which, in general, is supportive of the Government's policy.
	The removal of the words to which my noble friend referred is seen as a big reversal for competition policy. As everyone in the Committee knows, it has always been an objective of French economic policy to get this power in Brussels modified so that the strain of French policy that has always favoured the backing of national champions could continue. Those of my noble friends and noble Lords opposite who heard the speech of President Sarkozy in the Royal Gallery will remember that when he spoke about competition he referred to it being accompanied by support for national champions.
	In this country and in other parts of Europe, we have got used to there being a strong competition authority in Brussels to police the internal market and to ensure that there is no backsliding to the long-past, long-discredited era of subsidies and backing national champions. Alas, in recent years, there has been some evidence that Governments in Europe are increasingly resisting the powers of the Commission. Noble Lords may remember that, after the troubles at Société Générale, the French Minister of Finance declared that the French Government would not let the bank be taken over by another European bank or another bank from elsewhere. It was only when Brussels started making some noises that that was not within the power of the French Government that they decided to say that they had never said this at all. Similarly, there were instances in Spain where, in contested bids for companies in the energy sector, the Spanish Government indicated that they did not wish the full flow of market forces to have effect.
	The amendment that my noble friend has put down is extremely important. These powers are needed more than ever today because of the way in which Europe has been slipping away from what we call the internal market, which is always said by the Government and others to be the great achievement of the European Union. Nobody would applaud the internal market more than me. However, I have heard it declared many times that the internal market has been completed, whereas it is never completed but goes on and on. Anybody who knows anything about takeovers in the financial sector with countries such as Germany knows that the internal market is not the reality that people always claim that it is. The removal of the powers at the centre of the European Union to police competition and to ensure the full play of market forces is extremely important. I put it to the Government that it is a most retrograde step that the treaty was altered in this way. I strongly support the amendment of my noble friend.

Lord Pearson of Rannoch: I support these amendments generally, of course. I would like to underline a point made by the noble Lord, Lord Hunt, in introducing the amendments, which is the absurdity of the European Union's aim to make the single market one of the most dynamic economies in the world. I have to ask the Minister whether she still believes that that is the vaguest of possibilities when we consider the emerging economies of China, India, Brazil, Russia and so on.
	One has only to look at the European Union's financial services action plan, a group of some 41 directives that appear to be aimed at making the City of London uncompetitive with the rest of the world. If that is not a deliberate aim, it will certainly be the effect. If the Minister and her advisers have not seen it, I suggest that they look at Open Europe's analysis of the financial services action plan, Selling the City Short, which analyses all those directives: the market abuse directive, which we certainly do not need, as we can do it ourselves, the markets in financial instruments directive, the prospectus directive and so on. Open Europe, which we have prayed in aid before in these proceedings and on the whole found to be extremely accurate, estimates the cash cost of implementing these regulations at some £23 billion over the next three or four years. But it is the knock-on effect from this regulatory atmosphere that is already beginning to drive valuable businesses in the City overseas.
	Through its competition policy and its economic policy generally, the European Union imposes the Franco-German social and labour model on the rest of us. This does not suit the United Kingdom; it suits us less than anyone else. As I have mentioned before, only some 10 per cent of our economy trades with the single market, another 10 per cent, roughly, trades with the world outside the single market and 80 per cent stays here in the domestic economy. That gives the lie to our Europhile friends who constantly tell us that, if we were not in the European Union, we would have to obey its regulations but we would not be able to take part in making them. The 9 or 10 per cent of our economy that trades with the European Union would indeed have to obey the rules set by the single market just as, if one is selling a motor car to the United States of America, it helps to put the steering wheel on the left. It is precisely that analogy.
	The overregulation of the single market has been recognised by Competition Commissioner Verheugen, who, about a year ago, put the cost of EU regulation at some 6.5 per cent of GDP. That is a colossal figure and higher than figures that have been produced by various British analyses of our position in relation to the single market. It is not just the rabid Eurosceptics who are saying this. No less a body than the Conseil d'Analyse Economique, the top French economic think tank, which reports directly to the French Prime Minister, said some 18 months ago that the single market had done nothing for the French economy. It also said that the euro had done nothing positive for the French economy. It is true that this institute, having carried out this accurate analysis to say why the single market had done nothing for the French economy, went on to say that of course the answer is "more Europe". It is at that point that we Eurosceptics part company.
	In conclusion, it gives me great pleasure to agree with your Lordships' Select Committee on the European Union when it says that the future of the single market appears at risk. I very much hope that it is and that we can get back to open free trade between consenting democracies as this unfortunate project of European Union crumbles over the years to come.
	While I have the opportunity, I would like to say that I did not earlier in our proceedings "impugn the integrity" of our Select Committee on the European Union. I merely pointed out that, if 23 people out of 24 are on the whole passionately in favour of the project of European integration and only one is fairly strongly against it, it would not be human unless that committee produced a report that was favourable to such integration and not favourable in the other way. I hope that that does not impugn the integrity of anyone and I certainly would not want to impugn the integrity of its chairman, the noble Lord, Lord Grenfell, of whom I am extremely fond.

Lord Radice: I was not going to intervene in this debate but we have had very much one tone in it. I begin by congratulating the noble Lord, Lord Hunt, on a skilful speech in which he cleverly mentioned the key point—that there is a legally binding protocol—at only the very end. Everything that has been said would stand. It is perhaps a pity that we no longer have the wording about the free and undistorted competition as one of the constitutional treaty's objectives. As the noble Lord, Lord Hunt said, and he is always an honest man, there is this legally binding protocol to the treaty of Lisbon which ensures that,
	"the internal market ... includes a system ensuring that competition is not distorted".
	That is the key quote. The protocol says that the single EU market, which is a clear objective in Article 3 of the new treaty, includes a system ensuring undistorted competition. There are references to competition in the existing treaties, and they all remain in Articles 4, 27, 34, 81, 89, 91, 96, 98, 105 and 157. The idea that competition has somehow been wiped away from the whole of the European Union is way over the top, and is not true. When this legislation goes through, the legal position in relation to competition will remain unchanged.

Lord Pearson of Rannoch: Could the noble Lord explain the point of going through the exercise? It is exactly the same question that the noble Lord, Lord Forsyth, put earlier to the noble Lord, Lord Maclennan. What is the point of doing this if it does not make any difference? Is he sure, and can he assure the Committee, that when a case comes before the Court of Justice it will not use the fact that free and undistorted competition has been taken out of the main body of the treaty and put in a protocol at the back as an indication of intention for its judgment?

Lord Forsyth of Drumlean: If the noble Lord, Lord Radice, has finished, I was hoping to hear from the Liberal Benches; I thought we might hear a speech in support of their amendment. I support the amendment so ably moved by my noble friend Lord Hunt. I sat at his feet when he was Secretary of State working for these very objectives, to reduce regulation in the European Community and promote the open market. I sat in disbelief listening to the noble Lord, Lord Radice, trying to tell us that the declaration that has been taken out and replaced by a protocol means the same thing. It does not mean anything of the sort.
	We need to be honest here and point out what is going on. Once again, just as we have a split personality in the Liberal party on the legal personality of the Community—the Liberals in the other place think one thing while the Liberals up here apparently think another—so we have a split view about the overall direction of the Community. I understood that the British position has always been that we want an open market, free of barriers to trade, that recognises that a policy of national champions will, in the end, make those so-called champions weaker and less able to create wealth and prosperity for the peoples of Europe.
	The whole point of being in this club is to maximise its economic success by promoting open market competition. The French may take a different view, but that is what has been incorporated in the treaty. It is regrettable and disappointing that the Government, who are so committed to the treaty, did not fight somewhat harder. I hope, if only to find out just how split a personality the Liberals are, that my noble friend presses his amendment to the vote so that we can see the names in the Lobby.

Lord Grenfell: It might be helpful to the Committee if I quote from the report, because this has not been mentioned. It says in paragraph 9.14:
	"The rules on competition contained in previous treaties would be unchanged by the Lisbon Treaty. Articles 101-103 of the TFEU are the same as Articles 81-83 of the TEC. They give the EU power to legislate to combat practices 'which have as their object or effect the prevention, restriction or distortion of competition'."
	That is an addition to what is in the legally binding protocol.

Lord Williamson of Horton: I thank the noble Lord, Lord Hunt of Wirral, for putting these amendments together into one block—a great advantage—and for using the old English word "zeal", which I have not heard from the opposition Benches for some time. I also support what the noble Lord, Lord Lamont, said, about the incredible importance of this part of the responsibilities of the European Union. I accept that Amendments Nos. 29A and 29B are not wrecking amendments; none the less, they put up quite a big hurdle, in the sense that Amendment No. 29B would require an affirmative resolution of both Houses before the Act could come into effect.
	I shall speak about the competition rules because they are an area we should be careful about changing, and the amount of work put into that sector by the European institutions, particularly the European Commission, is important. It is not just the big issues; there are a large number of small issues about subsidies to individual companies and so on where we urgently need the Commission to continue the sort of work it has carried out over many years. We cannot afford to lose them because we cannot play our European matches without a referee, and obviously we do not want to give the referee a red card—although some teams sometimes wish that would happen in European competitions.
	This is an important area for the United Kingdom. I stress that in any one period there are a large number of decisions, not just the important ones on competition issues that we need to have taken in order to protect the free market. The consequence of the large number of decisions, many of which are directed to one country only, is that they are mostly short-lived because action is taken, but generally there are six to 10 times more decisions in a year than there are directives in the European Union. In consequence, a large number of them are withdrawn. Those who quote figures about legislative Acts might bear in mind what a large number are withdrawn; for example, in 2006, 943 European legislative Acts—that is, directives, regulations and decisions—were repealed, withdrawn or expired, and 532 of those were decisions. As a matter of interest, because I am sure we can put anything into the debates here, in 2006, 264 Council decisions were adopted while 296 decisions expired or were withdrawn or repealed, so the net effect in 2006 was minus 32 decisions from the Council. We have to be careful how we handle this issue to continue benefiting from the competition rules, and we want to see those fully carried forward in the Lisbon treaty.

Lord Blackwell: A number of the amendments in this grouping relate specifically to the single market and the customs union. Those, at least in the shape of the Common Market, have been part of the European Union since its foundation. Before we nod these changes in the treaty through, however, we need to consider whether they take those two institutions in the right direction and whether we are close to the point where they may no longer be acting in our best interests. One has to compare anything that is bound up in these treaty structures with the alternatives of simply adopting a system of free trade and free capital movement. We may be moving in the wrong direction because the treaty—as we have heard from its objectives, which introduce the objective of a social market economy—is moving the regulations and apparatus of the single market further away from free trade and free competition and closer to the objectives of a protectionist, high-cost, uncompetitive market structure that may not be in our best interests.
	We no longer have dedication to liberal markets in the European Union. The movement towards a social market, as opposed to a liberal market, is an explicit adoption of a political philosophy that ends up producing harmonisation by legislation and regulation that is not always intended to achieve the most competitive outcome for our businesses and our competitive standing in the world. The alternative is to have harmonisation driven by market forces, by businesses adopting those standards and regulations that they believe it is in their interests to adopt to be able to sell in those markets that they want to sell in. Increasingly, those markets are not in the European Union but, by selling into those markets, our businesses are now burdened by the costs and regulations imposed by this protectionist market in Europe. We are reaching the point where the balance of costs from the single market, as it has evolved, is too high. A number of noble Lords have mentioned aspects of that. The City of London is an important example of the single market being used in ways not necessarily in our interests. We are reaching the point where we need to take stock of whether further moves in the direction that this treaty takes us in, towards a social-market view of the single market, are in our interests.
	Similarly, the customs union has increasingly become a protectionist vehicle, where deals which we might have done and supported to open up free trade to benefit third-world countries as well as our own economy have been blocked because of the CAP hostage that the European Union has put as a blockage to any further trade liberalisation. Again, this is not necessarily in our interests. While I understand the point that will be made—that the customs union and the single market are, in essence, part of the foundation of the European Union and are not introduced by this treaty—we need to consider that the changes this treaty is bringing about, and the objectives that it puts into the European Union in the operation of those aspects of the Union, are taking us in the wrong direction. It is, at best, a missed opportunity for the Government not to use this treaty to try to get those reforms. At worst, it takes us in a direction that may be very damaging for the UK.

Lord Pearson of Rannoch: Would my noble friend agree with a point that I forgot to make in my recent brief intervention? The overregulation from Brussels applies to 100 per cent of our economy, including the 80 per cent that takes place in the domestic market. It also hits the 10 per cent of our vital trade with the emerging super-markets of the East, and so on. Is that not another important consideration when we consider our relationship with Brussels?

Lord Blackwell: I am happy to endorse the comments of my noble friend.

Lord Hunt of Chesterton: This has been a very surprising debate. We have heard from the other Side about a world of economics that I do not recognise. I know I am a professor, but I also sit on the advisory board of EDF Energy and I have a small company that operates around Europe. The changes that have taken place in Europe from the European science and technology programmes, through regulatory software from the UK now being used in France, Germany and other countries, are extraordinary. When I began in this business 30 years ago I never thought it would be possible for UK governmental regulatory software to be used by the French Government. Such things are quite normal now. They are stimulated by the EU. Talk to businesspeople, scientists and technologists across Europe about this world we are in, and the difference in attitudes is extreme.

Lord Forsyth of Drumlean: As the noble Lord mentioned EDF, could he tell us what he thinks the prospects are for access to provide utilities in France, compared to the opportunities for French and Spanish companies to provide utilities in Britain?

Lord Hunt of Chesterton: I think it will happen slowly. We are benefiting. We had a debate on nuclear energy when many colleagues from the noble Lord's Side quite rightly welcomed the idea of the development of nuclear energy, wherever it came from, in the UK. You have to go to the United States; you will see far more restrictive policies in many areas. We have a combination of science, technology and an emerging free market. This would not happen if we went back to a more old fashioned kind of Europe.

Lord Dykes: I think we all agree that there has been substantial progress from the tone of the noble Lord, Lord Hunt of Wirral, when he moved his amendment. We are grateful for what he did in the clustering of the amendments, because the clustering was re-formed, if I remember rightly, following the change in the list. We are also grateful for the fact that the Conservative Opposition are withdrawing amendments, or reducing their number occasionally, to try to speed up the process, which we need to do in Committee. It is necessary to register that point.
	The noble Lord, Lord Williamson, or another noble Lord, may have said that this was not a wrecking amendment. In a way, it is the first one of this kind. We understand the natural enthusiasm of the Conservative Benches for open competition and free markets. That is axiomatic. Indeed, an aspiration to, and affection for, that philosophy is shared in all parts of the Committee. The tone has changed and I welcome that. The previous kind of amendment was not so much in that category. As the noble Lord, Lord Hunt of Wirral, quite rightly said, the Liberal Democrats proposed a particular amendment because the anxiety over President Sarkozy's intervention was enormous at the time, and it was necessary to make sure that that was clarified. It has been partly clarified in quite a positive way, but perhaps not quite enough. We need further clarification when the noble Baroness the Lord President has time to refer to it tonight.
	Coming to the main point of the amendments, I do not find it easy to understand the anxieties that have been expressed by certain Members. The noble Lord, Lord Hunt of Wirral, in his own words, referred to Mario Monti as one of the people who was, perhaps, a bit difficult on this score, from the general British viewpoint in this area. We remember a previous, far nobler episode when, at the time the Labour Government were new, Mario Monti was the Commissioner who insisted that duty free be abolished. There was ferocious opposition from British sources, including large corporations in Kent and elsewhere, who said that 100,000 jobs would be lost in Kent if duty free was abolished. Germany supported from behind with less strength. The British led that campaign to keep duty free. A more restrictive practice I cannot think of. We proudly did that and many people supported it. The Conservative Party was enthusiastically trying to make sure that Mario Monti was defeated. With enormous courage, he stuck to his guns and insisted that duty free be abolished. We saw the benefits of that process. It did not in any way dent the ability of each member state to charge its own indirect taxes, levies and duties on alcohol and other goods.
	It goes to show that there is always a package of aspirations and impressions, does it not? Some countries have good examples and bad; we all have good examples and bad. The other countries quite rightly regard our failure to join the single currency as one of the greatest restrictions on a genuine single market. British Ministers in the previous Conservative Government used to say repeatedly that one could not, in essence, have a real single internal market without a single currency. That is the reality for those counties that had the courage to join the euro, which they have done with increasing success. You can tell because it is mentioned less and less in British newspapers, which is always the yardstick of success.
	On these Benches we recognise that, in practice, the primacy of Community competition law inevitably restricts the ability of member states to legislate for additional competition and controls. In cases where those controls may directly or indirectly affect interstate trade within the market, that is an important part of the panoply of the European Commission's powers. I hope that the British national Parliament, in both its Houses, will make sure that it continues to support the Commission in creating that Europe-wide competition and, indeed, in ensuring that international competition spreads beyond the boundaries of the EU itself. After all, we are the major supporter of this much more active and effective competition policy under Wim Kok, and Lisbon mark 1 and mark 2, which are reinforced.
	I agree with the noble Lord, Lord Hunt of Chesterton, that the idea that the European economy is not successful is absurd. It is very successful in many ways. Unfortunately we only have 110 kilometres of high-speed track. Even Spain is now aiming for 10,000 kilometres by 2014. France already has 7,000. There are many examples either way, some initiated by the state sector. The first very successful people carrier on the Continent was the French Renault Espace, which was produced by a public sector corporation. So the idea that one has to be ideological about all these points is incorrect. However, we need a very strong internal market and we welcome the opportunity for the noble Baroness the Lord President to explain the Sarkozy syndrome to us again.

Lord Forsyth of Drumlean: Before the noble Lord sits down, will he indicate whether—perhaps I missed this—he will support the amendments which were tabled in the other place by Vince Cable, and which my noble friend has tabled here tonight?

Lord Dykes: Speaking from memory, the Vince Cable amendment was accepted on its own by the Speaker of the Commons. We were not supported then—again, I speak from memory—by the Government or the Tories. We put forward the amendment on our own and we lost the vote.

Lord Brooke of Sutton Mandeville: I promised the Lord President that I would be extremely brief. I am delighted that the speeches which succeeded that of my noble friend Lord Hunt afforded enough time for the noble Lord, Lord Dykes, to receive instructions on how he should play this debate, given the turn of events.
	I am a bear of very little brain but late at night on the first night in Committee I revealed that I had served on the Budget Council of the European Union for four years. During those four years we knew when we had won an argument and when we had not. I agree that some victories are not clear cut. In the War of the Spanish Succession, Ramillies and Bleinheim were clearly profound victories, Oudenarde and Malplaquet were more doubtful. But nobody has ever suggested that the Battle of Waterloo was other than a victory, even if Prince Blücher sought to persuade Wellington in the picture that looked down on President Sarkozy when he made the speech to which my noble friend Lord Lamont referred, that the title should be changed to the name of the pub, the Belle Alliance, in which Napoleon ran his campaign during the battle and which is in the background of the picture. Nobody has suggested that it was other than a clear victory.
	The question which we have to ask the Lord President from these Benches is, notwithstanding what the noble Lord, Lord Radice, said about the legal protocol, why was the Sarkozy amendment allowed to go through, given the pride that he self-evidently took in the matter at the meeting in the Royal Gallery, to which reference has been made? How can the position which we were defending as we went into that meeting—like the Duke on a ridge in front of the village of Waterloo—have been reinforced by making the concession that we did?

Baroness Ashton of Upholland: I am extremely grateful to the noble Lord, Lord Hunt of Wirral, for bringing together this group of amendments to enable us to have a broader debate although noble Lords have inevitably focused on the President Sarkozy issue, particularly as regards Customs, which I shall come to, and other issues. I shall try to deal with each of the amendments, albeit it somewhat briefly in some cases, so that they are dealt with by the Government Front Bench.
	The noble Lord, Lord Brooke, always gives me the benefit of a classical education. I was not trying to suggest that he should be brief. I seem to have gained a reputation for insisting that noble Lords should be brief. The noble Lord, Lord Forsyth, nods, which suggests that I might be trying to beat noble Lords into submission. Heaven forfend. I was merely trying to ensure that I noticed everybody who wished to speak. I had not noticed the noble Lord, Lord Brooke, for which I apologise.
	I shall deal with the amendments in order to ensure that I cover them all. Amendment No. 29A has two parts. The first relates to the confirmation that the Union has exclusive competence to establish competition rules. Noble Lords will know that this competence is not new; it simply confirms the current position. By definition, rules necessary for the operation of the internal market—an EU-wide market regulated at EU level—must be an exclusive competence of the EU. If rules necessary for the operation could be set aside, it is hard to see how it would function effectively. The reason there has not been a change in terms of the single market in this amending treaty is because we believe that the arrangements and the rules that are staying in force are appropriate and good and there is no need to tinker with them. We believe that our access to the single market makes the UK such an attractive destination for investment. With that access comes certain common rules that are necessary for the functioning of the single market. Competition rules are among the most fundamental of such essential rules. As noble Lords will know, that does not mean that the whole area of competition law is an exclusive competence. The UK can, and does, set additional competition rules for other purposes that do not obstruct the operation of the EU's rules.

Lord Pearson of Rannoch: This is one of the central planks in the economic debate about our relationship with Europe. Can the noble Baroness tell us why we would be any worse off if we had a simple free trade agreement with the single market as opposed to being in the Customs Union that is a single market? Why would we be less attractive to foreign investment? Why would we suffer at all if we merely had a free trade arrangement instead of all the baggage that goes with membership of the EU?

Baroness Ashton of Upholland: The EU is not just about a free trade agreement, important though that is. From his perspective the noble Lord sees that that is an adequate and appropriate relationship with other member states. That is his opinion. In the opinion of the Government and, I think, that of the Conservative and Liberal Democrat Front Benches, and probably that of many Members who have had the privilege and pleasure of being involved in the European Union, it is much more than that. The noble Lord believes that that is as far as he wishes to go and, indeed, his political party would say so. That is for them to put forward. The Government's contention is that the EU brings much greater benefits, not least, as we mentioned in earlier discussions and will do so again, in terms far beyond simply trade; for example, in terms of how we tackle some of the big issues that face our countries such as climate change. The noble Lord and I differ on that principle.
	The second part of the amendment concerns the publishing of the report. The European Commission publishes its annual report on competition policy which we ensure is deposited with explanatory memorandum for scrutiny by the relevant European Committee of both Houses of Parliament. We do not as a matter of policy comment on the competition enforcement activities of independent competition authorities, be they at national or European Union level. It is important that they are able to carry out their function free from political interference. I hope that the noble Lord will consider that I have addressed that amendment.
	Amendment No. 86, which refers to the protocol on the internal market and competition, goes to the core of much of the discussion that we have had on this group of amendments. Noble Lords identified the importance of President Sarkozy's position in this regard and the importance of the change that was made within the treaty. First, negotiations are negotiations. Many noble Lords present this evening and in the House overall have been involved in negotiations and will know that they are a give and take process in which it is often important to look at the domestic situation of those trying to put forward a proposition. The second element to a negotiation is to look at what would be the impact of that negotiated position. As I said in response to an Oral Question by the noble Lord, Lord Campbell of Alloway, I cannot read President Sarkozy's mind but I know that in putting forward his own negotiating position he will be very mindful of his domestic position. That is what Heads of Government must always be aware of. Therefore, I presume that the President of France put forward a proposition that he felt would find favour, and which he has subsequently said does not have legal force. I believe those were his words. I promised that I would not quote overseas leaders but I think that is a particularly relevant symbolic comment. I believe that the President of France made a symbolic gesture without legal force that was important in terms of his domestic circumstances.
	The response of the UK Government and the other member states involved will be to look at what is being proposed and assess its relevance and importance in terms of what was being negotiated. As the noble Lord, Lord Lamont, and other noble Lords said, this is a very important aspect of the functioning of the European Union and of the Lisbon treaty. As noble Lords will know, we considered carefully the other articles to which my noble friend Lord Radice referred: articles 4, 27, 34, 81 to 89, 96, 98, 105 and 157, where references to competition remain as they were. We will also have looked at the protocol strongly supported by the then-Prime Minister Mr Blair and the now-Prime Minister Mr Brown. I have no idea whether Mr Brown was upset, but I know that he supported fully the ambition of getting a protocol.

Lord Forsyth of Drumlean: I apologise for interrupting the Minister: I do not want to detain her. I am reflecting on the words she used about President Sarkozy: "a symbolic gesture without legal force". Does that mean that it is the Government's position that what President Sarkozy promised his people was an empty promise?

Baroness Ashton of Upholland: I am just quoting what President Sarkozy said in the last speech I heard where he referred to this. He said that this was an important symbolic gesture but it was not a legal change in any way. I am merely quoting him. I am not suggesting or trying to get into the mind of the President of France, nor indeed what he "promised to his people". That is simply my understanding of what he believes. It is a consequence of what happened. The point that I was moving on to is, having got that, it is important to see what the effect of what is being put forward would have. In any negotiation one looks at what is being put forward and determines whether it has an impact that would be detrimental either to the functioning of the European Union or to the Government's national interests.
	I have already explained that the other articles remain the same and read them out. I have also indicated that we promoted and pushed for a protocol to be clear on the matter. We then had to consider the question of whether a protocol has the right kind of status. I am going to quote John Major in 1992, who said:
	"The protocols agreed at Maastricht will become an integral part of the treaty of Rome under article 239 and will have equal legal force".—[Official Report, Commons, 21/5/92; col. 218.]
	Seventeen protocols were annexed to the treaty of Maastricht. The opinion in many different places but not least the Commission is that the protocol is as legally binding as anything else. That is the nature of protocols within European Union treaties.
	The question for the Government is simple. President Sarkozy has put forward a proposition for his own reasons. I do not pretend to suggest that I want to interpret them. Having put forward that proposal, which is important to the President of France, the responsibility of the UK Government is to consider whether it has an impact on the functioning of the European Union and national interest. Looking at the treaty, taking the right kind of legal opinion, it is clear that it does not. Noble Lords might have preferred to have the original text within the treaty but the bigger question for the Government is whether it makes any difference. The answer is no.
	Therefore, in the spirit of negotiation, it is reasonable for the UK Government to say that, provided we have all the other articles and the legally binding protocol, we believe that the position remains as it did. That is the position that the Government took and stand by.
	I turn to Amendment No. 63, which seeks to introduce co-decision for the proposals to address distortions in competition. We support that shift and we believe that it is important to involve the European Parliament in the process. It adds to democratic accountability and transparency.
	Amendment No. 62 relates to EU state aid rules intended to ensure fair competition and a single common market. Noble Lords know that the rules prevent state aid that would seriously distort competition. It is not in the UK's interest. We should have to notify all UK aid to and seek approval from the Commission before the aid could be given, not least because that could result in a delay of up to a year and hold up aid being given to small-scale projects that are unlikely to distort competition.
	Amendment No. 64 refers to the promotion of structural reform, the core of the Lisbon agenda which the UK has championed since 2000, referred to by the noble Lord, Lord Hunt of Wirral. Those treaty provisions introduced by Maastricht set a framework by which member states can co-ordinate their economic policies in order to boost competitiveness and productivity, which is a UK interest. The Lisbon treaty makes only limited changes to that framework. It retains the existing provisions for the co-ordination of economic policies by Ministers within the Council. That ensures that it is the member states themselves that remain responsible for their economic policy. It allows the Commission to address a warning to a member state on the same grounds on which the Council can address recommendations. It is an extra procedural step but a warning carries no legal force. It is another route by which our common approach to achieving economic reform could be held up to the light and examined.
	Amendment No. 32A refers to the confirmation in the Lisbon treaty of the fact that the single market is a shared competence. In order for the single market to operate effectively it is essential that some activities are managed at EU level to make sure that we have coherence, fairness and transparency. Amendment No. 39, to which the noble Lord, Lord Blackwell, referred, is about customs co-operation. There is nothing new in customs co-operation. We participated in it before we joined the European Union. We carry out important co-operation work with member states and the Commission. As the noble Lord will know, that is to do with money laundering, counterfeit goods and illegal meat products. Those are important areas in which we would wish to continue to be involved.
	Amendment No. 71 is on the common commercial policy, which covers trade. It has been part of the treaty since 1957 and has brought huge benefits to the UK. The process does not change under the Lisbon treaty. The key changes are the inclusion of foreign direct investment and the enhancement of the role of the European Parliament.
	Amendment No. 72 proposes inclusion of the words,
	"and services and the commercial aspects of intellectual property, foreign direct investment".
	The treaty merely reflects reality. It is also made clear that unanimity is preserved for CCP agreements in those fields when unanimity would be required for the adoption of internal rules.
	Amendment No. 80 looks at the extension of co-decision to the establishment of staff regulations.

Lord Hunt of Wirral: I am not moving that amendment.

Baroness Ashton of Upholland: In which case I think I have covered all the amendments. I hope the noble Lord is happy.

Lord Hunt of Wirral: Happiness is relative. I am grateful to the noble Baroness for her response. I am particularly grateful to my noble friend Lord Lamont for pointing out once again that there is some evidence that Governments are resisting the Commission's competition policy. He instanced in particular France and Spain, and a number of my other noble friends have given other examples. I certainly agree with my noble friend Lord Blackwell that we are probably looking at more than a missed opportunity—it is an indication that things are moving in the wrong direction. My noble friend Lord Brooke of Sutton Mandeville told us about the Napoleonic war, which the noble Baroness referred to as "a classical education". It was a classic example of exactly what we have been talking about; I agree with that. My noble friend Lord Forsyth instanced a number of questions that were aimed really at the Liberal Democrat Benches, and I shall come to that in a moment.
	To the noble Lord, Lord Radice, I shall say just this. Without going into great detail, there is some evidence that the European Court has questioned the validity of protocols. That is why one is cautious about putting one's faith into the changes that have taken place.

Baroness Quin: The noble Lord mentioned his concerns about the European Court of Justice, but surely the European Court of Justice would not ignore all the many clauses that have been quoted by the noble Lord, Lord Radice, and the noble Lord, Lord Grenfell, which are in the existing treaties and which have a clear commitment to undistorted competition.

Lord Hunt of Wirral: Yes, I agree. I mentioned the noble Lord, Lord Grenfell, who has been meticulous in ensuring that we get the full text of what his committee has deliberated on. He has done what the noble Baroness, Lady Quin, has just done—instant the existing provisions which have always been there. My concern is with the provisions that are no longer there and the replacement with the protocol which I was just referring to the noble Lord, Lord Radice. I cannot agree with the noble Lord, Lord Pearson. I think that he has already identified me as a Euro-enthusiast, which in his view is a derogatory term. I regard it as a symbol of something that I have believed in for so long: a prosperous, peaceful Europe. That is why we want always to improve the way in which the future will pan out.
	I agree with the noble Lord, Lord Hunt of Chesterton, not only because we have the same name, but because he made a very important point about the need for constant co-operation. It was my privilege to be associated with a number of instances of that co-operation when I had the honour of having ministerial responsibility for science.
	One strange comment came from the noble Lord, Lord Williamson, which I have been trying to work out. He said that the problem with Amendment No. 29B was that it would impose a hurdle. What is the nature of the hurdle? It is that the report must be approved by affirmative resolution of both Houses of Parliament. To a bureaucrat, that is a hurdle. To a democrat that is exactly what should happen. What is the point of being in this House if we do not from time to time affirm important resolutions? I find his comment slightly mysterious; no doubt he will explain it to me in greater detail.
	What lies behind this debate is the worry—a deep sense of foreboding—that it is not exactly just symbolic. Charlie McCreevy, the Commissioner for the single market, recently said that,
	"in reality, many countries give lip-service to open and free competition".
	I agreed with the noble Lord, Lord Pearson, on financial services, because we urgently need in that arena a more efficient and integrated market. In response to the noble Lord, Lord Williamson, I want to consider Amendment No. 29A, which has no mention of a hurdle. On an area on which I think all sides have reflected concern, it merely says that the Secretary of State should report annually to Parliament,
	"on the operation and application of European Union competition policy according to the principle set out in the Protocol on the Internal Market and Competition"—
	which meets the point raised by the noble Lord, Lord Radice. We are just keeping an eye on it. Therefore, I wish to test the opinion of the Committee.

On Question, Whether the said amendment (No. 29A) shall be agreed to?
	Their Lordships divided: Contents, 63; Not-Contents, 162.

Resolved in the negative, and amendment disagreed to accordingly.
	[Amendment No. 29B not moved.]

The Duke of Montrose: moved Amendment No. 30:
	Clause 2, page 1, line 12, after "excluding" insert—
	"(i) Article 2, paragraph 12, inserted Article 2B TEC (TFEU) paragraph 1(d), relating to the conservation of marine biological resources under the common fisheries policy; and(ii) "

The Duke of Montrose: This amendment was tabled by my noble friend Lord Howell of Guildford. I am still feeling confused by the reaction of the Liberal Democrats to their own amendment being moved in this House. Luckily, the noble Lord, Lord McNally, put us on notice at the end of his article in the House Magazinewhen he said:
	"My stratagem for the bill is now clear—we are going to confuse our opponents with the facts".
	If they have not confused themselves, I am sure that they have confused most other people.

Lord Forsyth of Drumlean: Perhaps my noble friend can help me. How can it be that the Liberal Democrats voted against an amendment that they put forward in the other place?

The Duke of Montrose: Is that not a question for the Liberal Democrats?

Lord McNally: How is it that the Conservatives voted differently in this House from how they voted in the other place? I said in my Second Reading speech that we were determined not to fall into Conservative elephant traps. Those will have to be a lot better than the one that they just tried to get us to trip into if they are going to succeed over the next few weeks. But I thank them for the advice.

The Duke of Montrose: This amendment opens up a subject that has caused a great deal of pain and confusion since the United Kingdom signed up to the treaty on the European Community in 1957. Since then, a proud industry has been decimated. This is particularly true in regard to the management of fish and marine stocks around these islands. It is incontrovertible that, so far as conservation of marine biological resources is concerned, if the common fisheries policy has existed at all, it has been an unmitigated disaster.
	When debating this issue in another place, my honourable friend Bill Wiggin pointed out that the Minister had affirmed that the EU competence on marine biological resources and fishing derived from Article 102 of the UK treaty of accession, which said that,
	"the Council, acting on a proposal from the Commission, shall determine conditions for fishing with a view to ensuring protection of the fishing grounds and conservation of the biological resources of the sea".
	Until now, that is the sole text to which the UK Government have signed up. This wording was found to be unclear, and a ruling passed by the European Court of Justice in 1979 said that:
	"The power to adopt ... measures relating to conservation of the resources of the sea has belonged fully and definitively to the Community".
	Noble Lords will be aware that this means that all control of the resources of the sea, right up to our shoreline, comes under the administration of the European Community. It is only by the grace of three derogations from the starting date of this ruling that we are allowed to administer our own territorial waters between the shore and the six-mile limit. Between the six-mile and the 12-mile limits of our territorial waters, the rules have to be acceptable to all member states. Defra has the responsibility for policing the area, and this is where it can impose its own regulations on British fishermen, but not on the vessels of other member states who have not given agreement. The type of thing that happens is that British fishermen, if they catch crabs that are below a certain size, have to put them back. However, if the French boats are fishing next to them, they can catch those same crabs and take them away, because a different size restriction applies in France.
	This derogation will expire in 2012. After this treaty, will this derogation be renewed under the codecision procedure or by the Council of Ministers? Whichever, it is bound to be an open question as to what new rules will be agreed under a regime that is founded on unrestricted access to the seas. Surely, when asked to clarify our treaties, we should consider going back to the original document before we sign up to any rewording of the provisions.
	The proponents of this treaty tell us that they wish to bring clarity to all European arrangements. In this case, clarity consists of adding to the heading of Article 1, Title II, which is "Agriculture", the words "and Fisheries", and then going on to codify the powers in Article 2, paragraph 12, Articles 2B and 2C, by saying that in the area of conservation of marine biological resources under the common fisheries policy, the Union will have exclusive competence. The treaty goes on to say that the common agricultural policy and the common fisheries policy will be areas of shared competence. So much for increased clarity.
	Does the Minister know what marine biological resources do not come under the common fisheries policy? Is it oil or something else? He will be aware that when an amendment on this topic was discussed recently in the other place, MPs who know the fishing industry—Members of all parties—expressed dismay at this allocation of competences. They all know that, at a time when it has been found in most countries that the success of the fishing industry is highly dependent on having reasonably local control, our Government have been prepared to sign a treaty which amounts to a power grab by the European Union of the management for all time of our considerable marine resources.
	Anyone would think that the UK would be in a very strong position when it comes to discussing fishing. Within the EU, some 70 per cent of fish landed come from within our 200-mile fisheries limits, although only 12 per cent are landed by British boats. The Minister will be aware of the importance of fishing to the Scottish economy. I believe that 65 per cent of fish landed come ashore in Scotland. Under the devolution settlement, Scotland administers the area of sea from Scotland out to the six-mile limit, but it is the control of the highly productive area between six miles and 12 miles that raises most concern and is the responsibility of Defra. Unless the UK is prepared to take a very strong stand on the issues in this area, one can see why the Scottish Executive will be demanding to take the prime negotiating responsibility in any future negotiations on the CFP. Even the European Parliament's Committee on Fisheries voted against the proposal in the treaty. The committee stated that,
	"within the context of the other exclusive competences of the EU which are detailed in the draft Constitution, the inclusion of the conservation of marine biological resources is anomalous and unjustified".
	All those in the industry who are trying to follow any programme of conservation or management around our coasts can feel only totally frustrated. The implementation of the clauses in this treaty will not help one bit. Fishing is bound to be an area of great interest and importance regarding marine biological resources, but there are many other areas, of course. What effects will these powers have on the Government's much vaunted marine Bill? It really looks as if all the questions of special protection areas and marine reserves will be dealt with at the say-so of Brussels. There will be spillover into permits for the abstraction of minerals. It looks as if, unless some other directive intervenes, the only areas on which we will have sole competence are the quality of the water and, possibly, leaving minerals undisturbed.
	What will the standing of the six regional advisory committees for fishing be? They have recently been set up and have been seen as a reasonable step towards resolving some of these issues on the waters around England.
	The main part of the common fisheries policy that has destroyed any credibility in its efforts at conservation has been the total allowable catch regime and the inevitable consequence of discards. The latest EU publication on this topic gives figures of the discards of flat fish in certain areas by beam trawlers at an estimated 70 per cent by weight and 80 per cent by number. Overall, it is an estimate of five tonnes of fish discarded for every tonne landed. Where can one see conservation in that? Even then, the EU has to admit that its knowledge of discards in some areas is poor, let alone the lack of accurate information on the catches of foreign vessels within the six-mile to 12-mile area. No wonder the fishermen out at sea all the time reckon that they have a much more realistic estimate of the status of the stocks than that obtained from the official statistics.
	There is some comfort for us in the determination of the present Commissioner for the CFP that, by the end of his term of office in 2010, there should be a new regime on discards for all countries. However, the record so far does not give us grounds for great optimism. Can the Minister say if and when the UK reckons to be able to submit its proposals for meeting this deadline?
	A properly managed and sustainable fishery is in the interests of all fishermen, and the fact that Britain should argue that it should manage its own fisheries does not mean that all the fishermen would have to be British. The only way that properly managed fisheries could be ensured would be to remove our waters from exclusive EU competence, as the amendment proposes. The only other solution would be an insistence on having the same powers that we have for six miles extended uniformly to 12 miles in the next EU derogation. But I think that we would have to wait an awfully long time before we could expect that concession. I beg to move.

Lord Teverson: I was somewhat bewildered at the speech of the noble Duke, the Duke of Montrose. The treaty states that the EU should have competence over marine biological resources and shared competences over everything else to do with the CFP and the common agricultural policy. That seems pretty straightforward. Biological resources clearly do not include oil, minerals, water, wave power, energy and all other issues in that area. We on these Benches would support the status quo. I was for five years on the European Parliament's fisheries committee, which it was good of him to mention. We were very clear about these issues of where the current treaties and practice actually stood.
	It is absolutely right that the common fisheries policy does not work. That issue is not one of biological resources. The Conservative Government in 1973 overwhelmingly handed a huge proportion of their allocation of channel stocks to the French and the Belgians. During their most recent period of government the Conservatives made no effort whatever to change the common fisheries policy, much to the dismay of other colleagues of mine in the European Parliament. I am delighted that the Conservatives are now repentant and that they have changed their minds on that policy—and that we might have from their Front Bench an apology for the misallocation that started back in the 1970s.
	Yes, the common fisheries policy needs to be radically changed and needs to become a regionally managed policy that involves not one member state and its national territorial waters, but nation states around natural fish stock areas. It is clear that renationalisation of the seas does not work. We have marine biological resources—mainly, but not exclusively, fish—that strangely do not have passports, despite e-borders programmes. They go from one national territory, sea or EEZ to another without any hindrance whatever. We can control our fish stocks as tightly as we might wish to nationally, but when the fish cross a boundary, another member state can take those fish stocks. That is why regional management around areas such as the channel, the North Sea and the Irish Sea is the basis on which the common fisheries policy should change, not the principle of a common biological resource.
	One of the things clear to me in terms of my fisheries work was that the states and regimes particularly successful at fisheries included New Zealand and Iceland, which had exclusive control and sovereignty over a continental shelf. That is not physically possible in the countries of the European Union, but we can get somewhere towards that if we have—as we have had since we joined the European Economic Community in 1973—at least a basis on which we can change the common fisheries policy to something far more satisfactory. To move it back to a sort of exclusively national regime would be a disaster for the fishing industry generally. I absolutely agree that we need to keep control of coastal waters and I am sure that that derogation will be renewed in the future, as it has been in the past. It is in the interests of all member states to do that.
	Therefore, from these Benches we see no problem with the status quo as it is described now, but I absolutely welcome the Conservative Party's determination to change fundamentally the common fisheries policy. It is a pity that they never lifted a finger to do so in their last Administration.

Lord Willoughby de Broke: I would like to intervene briefly, particularly following the speech of the noble Lord, Lord Teverson, who seemed to say, "Yes, the common fisheries policy is not working at all but we have to retain it". That seems a rather odd position to be in.
	I remember being on the Environment and Agriculture Sub-Committee, Sub-Committee D. We studied the common fisheries policy on several occasions. I remember members of the committee and the Opposition making passionate speeches about how dreadful the policy was. We had evidence from fishermen whose livelihoods were being taken away from them by the provisions of the common fisheries policy. I think that everyone agreed about it then, as they seem to now. The noble Duke who moved the amendment made that clear.
	I was shocked to hear that discards seem to have gone up rather than down during the intervening period. I think that the general discards are something like 60 per cent of the total catch and I cannot believe that the Government believe in retaining or pursuing a policy where 60 per cent of the catch is thrown overboard or, as was said, where 5 tonnes are discarded for every one sold. That seems to be an absolute monstrosity.
	Yet this policy is supported. It is not working but we do not want to change it, according to the noble Lord, Lord Teverson, because it is all part of the treaties and we should not have given it away anyway. Of course, I agree that we certainly should not have given our fisheries away. We managed them perfectly well before we handed them over to the European Union and, of course, countries manage their fisheries individually far better than the Union is able to do. Examples include Norway, Iceland and even Namibia, as well as New Zealand and Canada. They can manage their fisheries in an exemplary—

Lord Teverson: That is easy to say, but I just point out that the Grand Banks off Newfoundland are still as barren as they ever were and Canada has had complete control over its territorial waters. Canada has suffered very much, and there has been exactly the same problem with Pacific salmon. I am sorry, but it does not work.

Lord Willoughby de Broke: I think that the noble Lord might have to take that up with the Canadians, because I believe that the situation is improving significantly, particularly since they kicked out the Spanish fishermen who were overfishing Canadian waters. The Spanish have a long history of fishing in those waters. The noble Lord should read Kipling's Captains Courageous.
	The fact is that the common fisheries policy simply is not working, yet we seem to go along with it as part of the deal. There are passionate speeches made about how deplorable it is and Ministers make speeches saying that they do not agree with it, but it carries on and there is no sign of improvement. The Fisheries Commissioner may wish that things will change, but they do not seem to. Therefore, the amendment is definitely worth pursuing. If something is not working, why continue banging your head against a brick wall? Why not try to change and return to where we were, in control of our own fisheries? When we had a proper fishing industry, we could easily police our territorial waters, so that would be no problem at all. I am not persuaded by the arguments that, because we have handed over our fishing industry to the European Union, we should go on doing so even though it is not working. Everyone admits that it is not working, so why do we not change and do something different?

Lord Pearson of Rannoch: I, too, support the amendment. Perhaps I may add an interesting statistic to the figures given by the noble Duke, the Duke of Montrose, who estimated that for every tonne landed some 5 tonnes are discarded. Another way of putting that is that some 30,000 articulated lorriesful of dead fish are thrown back into the sea every year. That is about the measure of the problem; indeed, it is the lowest estimate that we have from the European Union. Other estimates put the figure at 50,000 articulated lorries, quite enough fish to fill the Palace of Westminster and the whole of Whitehall several times over—and there must be a number of fishermen who have lost their livelihoods who might feel that that would be a more positive use of those premises.
	The argument put forward by the noble Lord, Lord Teverson, that fish do not have passports and do not respect national boundaries does not work for the United Kingdom. I think that, the night before Edward Heath signed away our fisheries in a side agreement to the treaty of accession in 1972, we owned 70 per cent of the fish that swim all year round in European waters. Of course, that is why our dear partners-to-be in the European Union were so keen to get hold of them.
	Again, Canada is not a good example. One has only to look at the Faroe Islands, Iceland and Norway to see how a fishery can be successfully managed by a democratic nation state on its own. The average take-home pay of a Faroe Islands fisherman has become £45,000 a year under the islands' policy.
	The noble Lord, Lord Teverson and, I have no doubt, the Minister will say that the common fisheries policy requires radical change. I believe that the words "and fisheries" were added at the end of the heading on the common agricultural policy chapter in the Maastricht treaty. If you read on through the treaty as it was before those words were added, you will see that everything refers to agriculture—merely "and fisheries" was added at Maastricht. Now, in the treaty of Lisbon, there is an attempt to adjust that by saying that any phrase that comes in that part of the treaty and sounds as though it is to do with agriculture also covers fisheries.
	My question to the Minister is: why is it impossible to change this policy? Does it require unanimity? Can we not get a famous qualified majority vote? Who is it who opposes change to this scandalous policy? It must be one of the most destructive environmental policies on the planet, yet we are told that we need to be in the European Union to benefit from its environmental wisdom, weight in international negotiations and all the rest of it.
	Is it true that the bureaucrats who designed this policy in the first place had never been to sea? They had probably never seen a ship, let alone a fish unless it was sitting on their plate. Is it true that they did not realise that when the nets come up from the sea most of the fish in them are already dead? The attempt to practise conservation by limiting the number of fish that are landed in port was the mistake that caused the discards.
	I trust that that was a refreshingly brief intervention, but the question remains: why cannot this policy be changed? How is it possible that the nations of the European Union cannot come together and make discards illegal, as is done in these other countries, and simply eat or otherwise use all the fish that we have taken out of the sea and which are dead? Why do we have to throw them back?

Lord Stoddart of Swindon: I am certainly no expert on fishing, but during the time that I have been involved in the issue of Britain's membership of the European Union—originally, the Common Market—I have received a lot of letters and representations from the fishing industry. Certainly those who go out and catch the fish have found their livelihoods reduced time and time again. The large fishing industry that we had before 1973 is now a shadow of its old self, yet we are apparently giving even more power to the European Union to decide not only where and what we should fish but to whom we should give the fish.
	I understand—I may be wrong and I have no doubt that I will be corrected—that fish and other biological beings in the seas surrounding the EU are allocated to those who are not surrounded by sea. That seems to be an unfair distribution of a resource which this country used to own absolutely and which, generally speaking, it fished well. We had conservation measures in hand and I think that they were largely supported by the fishermen. That is why the industry maintained quite a large presence, whereas it now has a very small presence.
	The European Union's policies on fishing are, to put it mildly and kindly, rather crazy. As the noble Duke, the Duke of Montrose, pointed out, this country has 70 per cent of the good fishing in the European Union, yet we have seen foreign fishermen allocated quotas within British waters. They have been allowed to fish when our own fishermen have been told to stay at home. As I know, because I have been down there and talked to them, fishermen in the south-west are sitting in their houses having been banned from fishing. They see Spanish fishermen catch the fish that they used to be able to catch but can no longer because of some bureaucratic decision made in Brussels. What sort of policy is that? However, we now want to give the EU more power.
	Since 1973, we have had no opportunity to protect our fishermen. We tried to protect them. We said to the Scottish fishermen, "You are being unfairly treated. The Spanish are coming in and are catching fish that you should be catching but are barred from doing so to a certain extent". The House of Commons and this House enacted a Bill to protect the livings of Scottish fishermen, which was the right thing to do, but what happened? There was an appeal to the European Court, and the Court said, "You can't do that; they are no longer your waters. They're EU waters and the Spanish have every right to fish there".

Lord Teverson: I am sorry; I shall not intervene again. The whole point is that that episode had nothing to do with the common fisheries policy; it was to do with the single market. It was a great problem at the time because the Conservative Government had allowed free trading and quotas to be sold abroad in a way that other EU countries did not. It was a single market issue, not a common fisheries policy issue.

Lord Pearson of Rannoch: Can that be right? If the foreign boats had not been in our waters because we were controlling those waters, and once we had satisfied our own valuable industry, we would have let out our fishing to foreign boats that could use the surplus. Therefore, without the common fisheries policy, we would not have been at square one in the first place.

Lord Stoddart of Swindon: That is a very good point but the Scottish fishermen could not care less under what policy it happened. The fact is that the Government and Parliament tried to protect them from the depredations by the Spanish fishermen but were told by the European Court that they were acting illegally. Indeed, I think that they had to pay £200 million-worth of compensation to the Spanish fishermen—money that would have been better in Scottish rather than Spanish pockets, as these were, after all, fish that the Scottish fishermen had previously owned, so to speak.
	To date, the whole policy has been one of squandermania of our fishing resources, undermining this country's fishing industry and hurting the livelihoods of our very good fishermen, not only in Scotland but throughout the United Kingdom. A lot of decent, good people burnt their boats because they were no longer required, as they could no longer fish in the waters where they had traditionally fished.
	I am coming to an end but I should like to say something to the Conservative Front Bench. The Conservatives once had a very good idea. They said that the common fisheries policy was bad for our fishing industry and that when they got into government they would withdraw from it. Unfortunately, having said that they would withdraw from the policy, they then withdrew from that promise. If they examined the matter again and said, "In spite of this treaty and in spite of what the article says, if we get back to power"—they can get back to power if they have the right policies—"we are going to take back our fishing waters", that would be very popular; I assure them that it would help the Conservatives a great deal in the south-west of England. I do not expect a reply tonight of course but I think that it is something on which the Conservatives should reflect.

Lord Bach: I thank noble Lords for their contributions to this debate. I remind the Committee that Amendment No. 30 refers to a provision in the treaty setting out the Union's exclusive competence on the conservation of marine biological resources under the common fisheries policy, which reflects previous European Court of Justice case law.
	The Lisbon treaty makes no changes to the competence of either member states or the Commission when it comes to fisheries. Community competence over fisheries is shared, except for conservation measures, where, as we have been told, it has been the exclusive competence of the Community since the UK's treaty of accession came fully into force in 1979. The treaty merely codifies this.
	Judgments of the European Court of Justice in the 1976 Kramer case and the 1979 case of the Commission v UK have established that the conservation of marine biological resources under the common fisheries policy falls within the exclusive competence of the Community. The Lisbon treaty reflects that judgment by expressly stating that the conservation of marine biological resources under the common fisheries policy is within the exclusive competence of the European Union—in other words, it codifies existing case law. Fisheries will continue to be managed by the EU's member states and the European Commission, working together. The Commission will continue to have the lead on conservation measures.
	In moving his amendment, the noble Duke made it clear that he wanted to start a discussion on this issue. I do not think that he was for a moment proposing that his party favoured getting rid of the common fisheries policy—he will tell me if I am wrong—and although the noble Lord, Lord Stoddart, tried to persuade him that it would be a successful electoral move, I wonder about that.
	Concerning the common fisheries policy, everyone understands the wish to protect fish stocks in our waters and ensure that the benefit of them goes to the UK. However, what the noble Lord, Lord Teverson, said was absolutely right; fish do not respect national boundaries and our fishing interests extend well beyond the 200-mile limit. We need to have a policy based on the shared interests of countries that exploit the stocks in European waters. For better or worse—

Lord Pearson of Rannoch: I—

Lord Bach: If I may carry on; the noble Lord has had his say, so perhaps he would sit still for a moment.
	The common fisheries policy provides the mechanisms for doing that, so our case is that even if there were no such policy, we would have to invent something like it. We have to co-operate with those countries that share the fish stocks with us, and as a member of the EU we can, and do, negotiate improvements to the policy. Where there are problems with the common fisheries policy, the answer is to negotiate improvements to it, as we did in the common fisheries policy reform of December 2002, and as we continue to do.
	The noble Duke asked which processes will decide the arrangements up to six miles and on six to 12-mile limits, and whether the UK derogation would stay. We will be consulting on common fisheries policy reform, which will be dealt with by ordinary legislative procedure.

Lord Pearson of Rannoch: I merely wanted to repeat; does the Minister accept that when we joined the common fisheries policy in 1972, somewhat secretively, our fish resources were then enormous? Our national resources, all the year round, amounted to some 70 per cent of the fish that swam in European waters. Why, then, did we need to bring anyone else in to share them? Why could we not manage them ourselves for the benefit of our own fishermen, then lease out any surplus fish to foreigners?

Lord Stoddart of Swindon: On the same point, the Minister just said that we will have to make arrangements with other countries that had fishing interests. That is fair enough, as we have always had to do that, but now we have to make arrangements with people who have no fishing waters. They are in the majority in the EU, which is one of the problems.

Lord Bach: I think that the noble Lord, Lord Stoddart, gave the answer to the noble Lord, Lord Pearson, because we have to deal with European countries that are also involved in this problem. That would be so whether we were in inside or outside Europe, and whether there were a common fisheries policy by name or a rose that would smell as sweet. We would have to negotiate, talk and work with other European countries. I want to put one thing to rest. It is not right to say that some of our fish will be allocated to countries with no coastline; I am advised that that is completely untrue.

The Duke of Montrose: I wanted to come back on the point that the Minister was making before he had to give way. I understood that the derogation we had, giving us those rights within the six-mile limit, was given by the Commission. Under the new regulation, where it would be done under the treaty, would that be by co-decision or by the Council of Ministers?

Lord Bach: My response is that, as I understand it, it will be done by ordinary legislative procedure—that is, QMV by the Council—and co-decision.
	Unilateral withdrawal from the CFP, which some have suggested, would do a number of things. First, it would leave the UK in breach of its treaty obligations. Infraction proceedings could then be commenced against the UK at the European Court of Justice and, if that Court were to find against us, we would incur a fine on a daily basis while the breach continued. Even more importantly, perhaps, withdrawal would not solve the fundamental problem of low fish stocks and the tough conservation measures required to restore them to healthy levels.
	We have been in the lead—not alone, but in the lead—in pointing out that the common fisheries policy has not met its aims, but our answer is to improve the CFP, not to pull out of it. That is what we have been doing, first, by getting the instruments of the CFP improved in the 2002 review, and by working to secure better decisions since then under the improved mechanisms. The industry and others with an interest in fish stocks need to work together with scientists, government and our partners in Europe. I am delighted that the noble Duke was fair and reasonable, as he always is, about the operation of regional advisory councils, where the kind of co-operation I am talking about has begun. Those regional bodies represent a wide range of stakeholders, who provide advice to the Commission on the common fisheries policy and its implementation.
	On which marine biological resources are not covered by the common fisheries policy; the policy is one tool with which to manage marine resources. There are others, which can afford protection to the marine environment, including the habitats and species directive and the marine strategy directive. The CFP does not cover issues unrelated to marine biological resources, such as oil exploration.
	On discards, withdrawal from the CFP would not address the issue of discarding fish. Everyone agrees that that is a real waste of a valuable resource and no one wants to see it. Because of the mixed nature of a wide variety of UK fisheries, with large and small fish and various species of different sizes all swimming together, discarding would be an inevitable consequence of any limitation on fishing activity designed to protect particular stocks, whether under a CFP management regime or otherwise.
	For that reason, we believe the focus of attention should be on working within the established mechanisms of the common fisheries policy to make fishing activity more selective, so that unwanted fish are not caught in the first place. The worst management measures that would lead to discarding would be no measures at all. The key indicator is fishing mortality, or the proportion of the stock removed by fishing—for cod in the North Sea that is, thankfully, now at its lowest since 1969.
	There will be no one-size-fits-all solution to this problem, and we are seeking targeted solutions. We have worked with the industry on ways to avoid North Sea cod but still allow fishermen to continue to fish stocks that are sustainable, such as North Sea haddock. We are currently operating a system that provides additional fishing days, which are otherwise restricted, to fishermen who adhere to closures to avoid spawning or young cod and are willing to change to gear that catches fewer young fish—and such gear does exist—or to introduce fishing plans that commit to significant reductions in cod discards. We are also funding a range of further work to assess the value of other options.

Lord Willoughby de Broke: I apologise for interrupting, but the noble Lord said that since the Fisheries Council of 2002, the Government have worked for improvements, but the figures that the noble Duke, the Duke of Montrose, produced are still truly shocking. Will the Minister not admit that to have 60 to 70 per cent of the catch still thrown overboard as discards cannot conceivably be called an improvement since 2002? That is six years ago. Has nothing happened since those alleged efforts by the British Government to improve stocks? We are still discarding the vast majority of the fish that are caught; that cannot be an improvement.

Lord Bach: What I was saying is that the CFP itself had improved in certain ways since the 2002 reform. I have already said that it is unacceptable; whatever the real figure is, the discard amount is too high. That is why we are doing our best to make sure that the figure comes down, but we have to do that in the right way. The mechanism has to be right. No one has put forward a realistic alternative to some sort of common fisheries policy, whatever you call it.
	I have completed what I have to say. The Committee ought to move on and the noble Duke should decide what he wants to do with his amendment.

Lord Pearson of Rannoch: Before the noble Duke does that, the Minister has not answered the question of how the Faroe Islands, Iceland and Norway, to name but a few, manage their own fish stocks for the benefit of their own people. The Minister has not answered the question I put to him, which is very important: why can that policy not be changed? What is the position between the Commission and the Council of Ministers? How is it possible that a group of 27 nations cannot get together and agree unanimously to change that policy?
	I also cannot let the Minister off with his statement that we would still need to collaborate with our European neighbours on some form of common fisheries policy. We would not. We would simply tell them to leave our waters while our fish stocks recovered and work for the benefit, in the first instance, of our fishing industry, which would recover. We would address discards in that way; like other countries, we would simply ban them. With our growing fishing industry, we would land all the fish that we catch. We would eat those that we want for human consumption; we could use some for animal consumption; and we could use the rest for fertiliser. We would not have to throw 30,000 articulated lorries-worth of fish dead back into the sea every year if we were managing our own fish.

The Duke of Montrose: I will bring this to a conclusion. It has certainly been an interesting discussion around the Chamber. I am grateful to the noble Lord, Lord Stoddart of Swindon, for emphasising the efforts that have been made on behalf of Scottish fishermen over the years; we are all very concerned with that. I point out to him that I suggested solutions other than withdrawal—although withdrawal was within my remarks. No doubt my colleagues at the other end will look at what he said, but I do not know what value they will put on it.
	I was very interested to hear the noble Lord, Lord Teverson, say how well he understands the difference between marine biological resources and the common fisheries policy. I suppose that one could say that until the point when a fish is caught, it is part of the marine biological resources, but the minute that it is in the net it becomes part of the common fisheries policy, but someone will have to work out how those two elements could go together. His remarks about the question of individual national management were a bit sweeping. Certainly some very successful countries control all their continental shelf. Norway does not have sole rights to the whole of its continental shelf, but that does not mean to say that some countries cannot do quite well managing a larger share of their inshore fisheries. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 31 and 32 had been withdrawn from the Marshalled List.]
	[Amendments Nos. 32A and 33 not moved.]
	[Amendments Nos. 34 to 37 had been withdrawn from the Marshalled List.]
	[Amendments Nos. 38 and 39 not moved.]

Baroness Crawley: I beg to move that the House be resumed. In moving this Motion, I suggest that the Committee stage begin again not before 8.24 pm.

Moved accordingly, and, on Question, Motion agreed to.
	House resumed.

Electoral Administration Act 2006 (Regulation of Loans etc.: Northern Ireland) Order 2008

Lord Rooker: rose to move, That the draft order laid before the House on 11 March be approved.

Lord Rooker: The purpose of the order is to introduce provisions for the regulation of loans to political parties in Northern Ireland. The order mirrors measures currently in place to regulate donations to political parties in Northern Ireland, and noble Lords may find it helpful if I set out the background to the legislation that we are considering this evening.
	Noble Lords may recall that the Political Parties, Elections and Referendums Act 2000 created a regime for the regulation of donations to UK political parties. However, the scheme did not extend to Northern Ireland at that time because special arrangements needed to be made in relation to donations to Northern Ireland political parties.
	For that reason, the Northern Ireland (Miscellaneous Provisions) Act 2006 amended the provisions of the 2000 Act to allow for Irish citizens and prescribed Irish bodies to make donations to Northern Ireland political parties. It also contained arrangements for the Electoral Commission to hold reports on donations confidentially until 2010. That Act contained the broad outline of the special arrangements that were needed in Northern Ireland.
	However, the detail of the scheme was set out in secondary legislation: the Political Parties, Elections and Referendums Act 2000 (Northern Ireland Political Parties) Order 2007. That order set out the conditions that Irish citizens and bodies must meet to donate to Northern Ireland political parties. It also set out the steps taken by the Electoral Commission to verify that reports on donations are accurate during the confidential reporting period.
	Noble Lords may also recall that the Electoral Administration Act 2006 created a new regulatory regime for the making of loans to political parties across the UK. As with donations, further legislation will be required to ensure that the loans regime operates effectively in Northern Ireland. That is precisely why we are here this evening. As with the donations regime, the Northern Ireland loans legislation must be introduced in two stages. The order before us this evening is made under Section 63 of the Electoral Administration Act 2006 and will set out in broad terms the special arrangements that will apply in Northern Ireland. The detail of how the regime will operate will be set out in a second order that we would lay subject to the House approving the order this evening.
	Noble Lords may—as everyone else associated with this does—understandably ask why two orders are required. We have consulted the Joint Committee on Statutory Instruments on the matter, and have concluded that two orders must be made in sequence. That is because the power to make the second order is contained in the order before us. It is not possible for the material in the second order to be made directly under the original statute.
	The order before us will allow Irish citizens and prescribed Irish bodies to make loans to Northern Ireland political parties. We intend to set out the conditions that an Irish citizen or body must meet to make a loan to a Northern Ireland political party in the second order—which, of course, will be debated in your Lordships' House. Those arrangements will acknowledge the special place that the island of Ireland and the Republic of Ireland occupy in the political life of Northern Ireland.
	The order also addresses potential concerns relating to the possible intimidation of persons and businesses that wish to make loans to Northern Ireland political parties. Northern Ireland has rejected the path of violence and embraced a peaceful and democratic future. However, a small minority still uses violence and intimidation to attempt to achieve its ends. These individuals must not be allowed to undermine the people of Northern Ireland's right to participate in the democratic process.
	For this reason—as with the regulation of donations— the order provides for legitimate loans to the Northern Ireland political parties to be reported to the Electoral Commission in confidence. The confidentiality period is temporary and will end in 2010. The period may be extended by order with Parliament's approval, but we hope that that will not be necessary.
	During the confidentiality period, the Electoral Commission will verify reported transactions and will release information contained in a report if,
	"it believes on reasonable grounds that the regulated transaction was entered into with an unauthorised participant".
	The steps that the commission must take to verify information contained in reports on loans will be set out in the second order.
	This order represents a step forward from the current unregulated state of affairs regarding loans to the Northern Ireland political parties towards a level of accountability that the rest of the UK now enjoys. It also acknowledges the important relationship between the people of Northern Ireland and Ireland and protects those who would wish to contribute to political parties in Northern Ireland from the potential threat of intimidation and violence.
	For those reasons I hope that the order will be supported this evening. As I said, much of the detail of how it will work will be covered in the second order which we will lay as soon as we can. Discussions are on-going and drafting technicalities are being dealt with. However, there will be no undue delay on our part in laying the order before the House so that it can be fully debated. I beg to move.

Moved, That the draft order laid before the House on 11 March be approved. 14th report from the Joint Committee on Statutory Instruments.—(Lord Rooker.)

Lord Glentoran: My Lords, I thank the Minister for presenting this order. For Hansard's clarification, and with all due respect to the Minister, could he just clarify something that he stumbled over in relation to the island of Ireland? I think he meant to say that this is in recognition of the special place that Ireland occupies in the political life of Northern Ireland. I hope he will forgive me for that small correction.

Lord Rooker: I am more than happy to do that, my Lords. I still cannot get used to the fact that we do not refer to the Republic of Ireland. I stumbled over that part of my brief because I saw "Ireland". Yes, I did mean the special role that Ireland plays in the political life of Northern Ireland.

Lord Glentoran: My Lords, I thank the Minister. Apart from that, I have in the past had some concerns over how this was going to work. I was much more concerned in some ways that this could not leak from Ireland and Northern Ireland into the United Kingdom. However, having had some conversations with officials and others, I am quite satisfied that this statutory instrument is as watertight as it can be and I hope will be. I support it.

Baroness Harris of Richmond: My Lords, we on these Benches also welcome the order, which we believe improves transparency. We also welcome the involvement of the Electoral Commission, which will verify the information given to it in the transaction reports. That is very important.
	The steps that the commission must take are to be prescribed by order, as the Minister said. Was that what the Minister was describing, the order that will come before us? When might such an order come before the House? I gather that it is for the future. As the prescribed period begins in July, one hopes that Parliament will be given adequate time to scrutinise such an order before then. I hope the Minister can give that assurance. Otherwise we support the order.

Lord Laird: My Lords, I join other noble Lords in thanking the Minister for outlining this order. I do not wish to make heavy weather out of it, because there is no heavy weather to be made out of it. The Minister said that the order is necessary in the improving state of affairs in Northern Ireland. We look forward to a day when it will not be totally necessary, which may be after 2012.
	The order indicates that it allows Irish citizens and Irish bodies to enter into financial transactions. What about people who live in the Irish Republic and are not UK-registered voters but who do not regard themselves as Irish citizens—they regard themselves possibly as British citizens or as British-type organisations? They are not Irish, and under the Belfast agreement they are entitled not to be Irish if they do not wish to be. How does the order cope with them? Apart from that one query, the group to which I subscribe will be supporting the order.

Lord Bew: My Lords, I should like first to apologise to the Minister for missing the first two minutes of his speech—which again, as in July last year when we discussed these cognate issues, was very fair and effective. I wish to speak in broad agreement, as has the noble Lord, Lord Laird.
	I do not want to revisit any issue from last July when we talked about the family legislation which dealt with donations. It is now 10 months on. It is now May 2008, and there is an awkward symbolism in the fact that the Government are telling us that they still believe that it is necessary to keep donations or loans secret because of the safety factor for individuals. At the same time, this is the month that our Government had said was in principle the right moment for the devolution of policing and justice for Northern Ireland. There is an awkward symbolism there. There is nothing to be done about it, but I think it should be noted this evening.
	There is also the fact that this issue is becoming more important in Northern Irish politics because of the increased discussion of the role that Fianna Fail might play in the politics of Northern Ireland. Some of our concerns regarding donations and loans from outside Northern Ireland seemed somewhat academic 10 months ago but now seem considerably less so. We are in a new place in both those respects. None the less, broadly, I have to concede that there are anomalies in life and particular anomalies in the peace process, and what the Government are doing tonight is acceptable. I only ask the Minister to reassure us that the intention is for the Government to look at this again in 2010 and that their view at this point is not that these arrangements are in any sense permanent.

Lord Brooke of Sutton Mandeville: My Lords, I would like to reassure the Minister that my contribution will be no longer than that of any other noble Lord who has spoken. I am much in his debt for having explained the background to this, which I would have had a little difficulty in following had he not done so. It is clear from the welcome that the order has received around the House that your Lordships approve of what the Government are doing.
	Since I am by nature an optimist, and since I recall with vividness the remarkable way in which the late great Lord Williams of Mostyn, who was once responsible for Northern Ireland affairs in your Lordships' House, turned the Bill on voting, postal votes and registration in Northern Ireland electoral matters totally around between Second Reading and Third Reading in this House, the Bill having already gone through the House of Commons where Mr Desmond Browne was not able at that stage to exercise the degree of influence that Lord Williams of Mostyn used, I believe the tremendous success of that legislation in regulating Northern Ireland affairs could very well be emulated across the face of the United Kingdom. If at any stage the Government choose to extrapolate from the example of Lord Williams of Mostyn, I think they will find that that also is welcomed on these Benches.

Lord Rooker: My Lords, my late friend Lord Williams of Mostyn was a class act and is much missed by the House. In this legislation we are seeking to catch Northern Ireland up with what currently happens in Great Britain. I love the phrase in my speech—I am trying to stick to the brief—which says that we now enjoy the benefit of donation and loans regulations. It was not always considered a benefit, but it was certainly found to be a necessity. From that point of view, there is a different experience in Northern Ireland.
	I do not have the title of the second order as it is not ready yet. There is still some drafting work to be done and some discussion to be had, although it is our intention to lay the Political Parties, Elections and Referendums Act 2000 (Northern Ireland Political Parties) Order 2008 as soon as we can. It is our intention for all the orders to be enforced by 1 July so there will be no undue delay and there will be plenty of time for debate in your Lordships' House. It will therefore be laid as soon as possible after this first order is agreed by Parliament. This first order has of course already been through the other place—I think it was last week or the week before.
	We have also had the benefit of the donations legislation for Northern Ireland for a short period; it came into force last year. There is nothing for me to report from the Electoral Commission on using the new legislation. Procedures in that legislation prevent leakage from Northern Ireland to Great Britain's political parties to prevent the brass-nameplate operations in Ireland being used as a front for money to the north. The rules about substantial functions of a business or other organisation are all there.
	There is also the citizenship issue. The noble Lord, Lord Laird, asked in a roundabout way—I think I have got his question right—whether UK citizens resident in Ireland can make donations to parties in Northern Ireland if they are on the UK electoral register. The answer is yes. If they are not, however, they cannot. That would count as a foreign donation because those are the rules; you must be on the electoral register. I was about to say that it is as simple as that, although from one or two cases that we have read about recently, people are learning from experience. There is this sensitive issue—I appreciate that—but the rules are quite clear; we are talking about Irish citizens. That was defined in the other legislation and it will be set out in some considerable detail in the second order that I will lay before the House.

Lord Laird: My Lords, does that discriminate against British citizens who live in the Irish republic and who are not voters in the UK, as opposed to their next-door neighbours who are Irish citizens and can donate money to parties in Northern Ireland?

Lord Rooker: My Lords, if there is an impediment to people being on the UK register, I am afraid they cannot make donations. That is the basic tenet of our ensuring that "foreign" money does not come into UK political parties. You can do so if you are eligible to be on the UK register. If you are not eligible, your donation does not count. So far, as I said, I have nothing to report from the Electoral Commission about donations. The rules will be broadly—I cannot say exactly—the same for loans as they are for donations.
	The noble Lord, Lord Bew, mentioned time. I fully accept his point. He mentioned that this month was forecast in the original legislation for the possible devolution of policing and criminal justice, which clearly is not taking place. We do not see this as a permanent arrangement. The confidentiality of loans and money to political parties must be temporary; otherwise there is no transparency in democracy. Therefore there is that limit. It can be extended, but it is not our intention either to extend the limit that we have now or to wish to do so when the time comes. There is a finite date of 2010. We are in a transition period in which Northern Ireland can enter normal civil society, which it is doing very fast. Part of that involves transparency in funding to political parties. We see no difficulty in the parties coming to the table in 2010 and being fully transparent.
	Unless I have missed out anything, I think I have covered the central thrust of the questions. As I said, the House will probably have the other order in a few weeks' time, when we can debate the detail and the nuances of the nature of the society and the organisations that will be eligible to make loans.

Lord Glentoran: My Lords, I am slightly perplexed about one issue. Perhaps the Minister can write to me. The noble Lord, Lord Laird, asked about British people living in Ireland and how they can donate funds to Northern Ireland political parties. If they are living in Ireland and maintaining a British passport, and bearing in mind that they are entitled to have two passports—an Irish one and a British one—I would be surprised if they were not entitled to the same benefits or rights as other Irish citizens in this context. I have not thought this through before, but when I listened to the small debate between the Minister and the noble Lord, Lord Laird, I was left a little uneasy that there might have been some confusion.

Lord Rooker: My Lords, I hope that I do not add to the confusion. As far as I can see, the position is absolutely clear. In order to donate, or indeed to loan, to a political party, you are required to be on the electoral register. It is a mechanism to stop any attempt to channel money to Great Britain. In other words, there is a ring-fence around Great Britain for all the main parties. Some of the main parties in Northern Ireland operate legally, although they may not put up candidates. This is an attempt to ensure that money is not passed from one to the other to undermine the GB restrictions, as much as anything else. It is quite clear that if you are eligible to be on the UK electoral register but are not on it, you still cannot donate. You must be on the UK electoral register to make a donation. If you are an Irish citizen living in Ireland, the order will allow you to donate as long as you are an Irish citizen or an Irish organisation—a company or otherwise—that functions in Ireland and is not a brass nameplate. The rules make that clear in the case of loans, so the rules in respect of this question will be the same for donations as they are for loans.

Lord Kilclooney: My Lords, this is still not clear. It is not a question of being on the electoral register. This is special legislation to facilitate people in the Republic of Ireland financing political parties in Northern Ireland. It is totally discriminatory. It allows Irish citizens living in the Republic of Ireland to finance and support parties in Northern Ireland that are generally nationalist and anti-British, and it forbids British citizens living in the Republic of Ireland to support other parties that may be pro-British.

Lord Rooker: Yes, my Lords, but it does not prevent British citizens living in England, Scotland and Wales from donating or making loans to Northern Ireland political parties. This is not a one-sided operation at all.

Lord Laird: My Lords, I draw the Minister's attention to the example of the 25,000 people along the borders with Northern Ireland who could consider themselves to be British and not Irish. They have been recognised under the Belfast agreement and get parity of esteem and total equality, but under this order they do not. The Orange Grand Lodge of Donegal cannot give money—it operates in the Irish republic but is maintained and operated by people from a British background who consider themselves to be British—while its next-door neighbours, the Ancient Order of Hibernians, can. Does that seem fair and in the spirit of the Belfast agreement?

Lord Rooker: My Lords, as I have said, the rules for this will be exactly the same as they are for giving donations. This has been agreed by Parliament. As I have already said, I have had no negative vibrations from the Electoral Commission on the way in which the system is working.

On Question, Motion agreed to.

Lord Davies of Oldham: My Lords, I beg to move that the House do now adjourn during pleasure until 8.24 pm.

Moved accordingly, and, on Question, Motion agreed to.
	[The Sitting was suspended from 7.50 to 8.24 pm.]

European Union (Amendment) Bill

House again in Committee on Clause 2.

Lord Taylor of Holbeach: moved Amendment No. 40:
	Clause 2, page 1, line 12, after "excluding" insert—
	"(i) Article 2, paragraph 48, amended Article 36 TEU (TFEU), first paragraph, the words "European Parliament and";(ii) Article 2, paragraph 49(c), amended Article 37 TEC (TFEU), new paragraph 2, first sentence, the words "The European Parliament and" and the words ", acting in accordance with the ordinary legislative procedure and"; and(iii) "

Lord Taylor of Holbeach: Amendment No. 40 is in my noble friend's name. I will also speak to Amendments No. 41 and 41A. I ask noble Lords to note that I am actively engaged in my family's agricultural and horticultural business and, as such, I must declare an interest.
	The Lisbon treaty and the new constitutional settlement—that is what it represents, notwithstanding the semantics of the Government's position—have relatively little to say on the detail of the common agricultural policy. This is probably just as well—noble Lords have enough to give them concern with the Bill as it is.
	However, it is a matter of European Union history that, other than the Coal and Steel Community, the common agricultural policy is the longest living relic of the idealism of those early days. It would greatly extend the nature of this debate to decide whether in the 1066 and All That version of history it has been a good thing or a bad thing. It has certainly presided over a period of considerable change—both structural and technical—and, up to now, provided the countryside with some economic security and the consumer with good-quality food at reasonable prices.
	However, things are changing fast and I am far from sure that politicians are changing fast enough. Almost certainly, Europe's common agricultural policy is too inflexible and hidebound in national self-interest to change fast enough. What have the Government been doing to force the pace of change? For what reason did we give up our rebate? It was in direct return for reform of common agricultural policy. Where is that reform? I have no doubt that the Minister will refer to the health check, but Miss Mariann Fischer Boel, the Agriculture Commissioner, expressly stated that it is not reform.
	The Government know that the enemies of CAP reform are deeply entrenched in Europe. How do they explain their weakness in confronting the opponents of change? Will the noble Lord give any assurances of worth in this area when it is clear that the French have dominated the agenda in agricultural affairs since the founding of the policy?
	Recent changes in market conditions have alerted all and alarmed some. They are not brought about by poor harvests alone but are also consequent on demand-led changes—global economic changes and the new demands of renewable energy and biofuels. All this has led to a realisation that all is not well in the world of the common agricultural policy. Stuck as it is in the political philosophies which gave it birth, it is overcentralised, overbureaucratic, inflexible and wasteful. The current health check is a long overdue investigation into where this policy is leading.
	It was originally envisaged that the CAP would support the interests of farmers and the rural community and, at the same time, look after consumer interests, but it is in danger of doing neither. It has become the creature of national Governments operating in their own self-interests and the victim of the trade-off policies which, more than anything, have destroyed the idealism that lay behind the formation of the European Community, now the European Union.
	Much will hang on the health check, the draft report of which is due next week. It would be useful for noble Lords to know—the Minister might assure the House—that the draft report will be debated here and that nothing in the Bill impedes such reform as may emerge.
	Amendment No.40 is designed to resist moves to weaken control of national Governments over important framework laws governing the CAP and the CFP. The Committee will know that many reforms have been suffocated by the inability of European institutions such as the European Parliament to come to grips with change. It has consistently opposed reforms such as those affecting the wine industry or increased modulation—that is, the transfer of budgets—whereas this country and Portugal have been alone in initiating them on a voluntary basis. Indeed, the Parliament has vouched to lock many of its current policies after 2013. Amendment No. 40 is designed to exclude codecision-making powers from the European Parliament, for it can be easily seen that it is likely to become a roadblock to reform and a second line of defence for protectionists.
	This is not assisted by the treaty, which, as my noble friend the Duke of Montrose pointed out on a previous amendment, gives the Community exclusive competence on the marine environment. It is true, as the noble Lord, Lord Pearson of Rannoch, has pointed out, that the definition of agriculture includes fishing. Additionally, "agricultural products" means the products of the soil, livestock farming and fisheries and covers the first-stage processing of all these products. Amendment No. 41 seeks to challenge the treaty in seeking such competency.
	We have can have no doubt, therefore, that Europe intends to maintain and extend control over these matters. Already overregulated, we should note that the Commission may also authorise other measures, the conditions and detail of which it shall determine. What role for Defra when the statutory instruments arrive by first-class post from Brussels?
	Amendment No. 41A seeks to make sure that Parliament here in Westminster still retains a role in the development of the CAP. I hope the Minister is able to reassure the Committee that this will be the case should the Lisbon treaty be ratified. I remember assurances that the whole purpose of the treaty was to engage national parliaments in codecision-making. Perhaps I have misinterpreted this proposal. It is certainly important to know that CAP reform would involve a role for Westminster.
	Perhaps I may conclude by making a particular observation. The Lisbon treaty makes provision for the common organisation of agricultural markets in one of the following forms: common competition rules, compulsory co-ordination of national market organisation or a European market organisation—different structures for different products. It is not difficult to see that this could lead to a considerable tightening of the interference and control in the marketplace. I am minded that the drafters of such proposals need a seminar on the operation of the market from the noble Lord, Lord Jones of Birmingham, who, although not in his place, instructs the House as a Minister on this subject regularly and to good effect. Regulation and control have no relevance for a world which has become anxious about food security and where land-use prioritisation, following the development of biofuels, is creating powerful pressures to increase capacity.
	The Government have presented us with a Bill which they say is designed to set the pattern for the future of the Union. The reality is that it avoids issues such as the CAP, or where it includes them does so in such a way that it makes them irrelevant to the greater challenges facing Europe's farmers and the anxieties of Europe's citizens. Our amendments recognise this. I beg to move.

Lord Willoughby de Broke: I support the amendment so ably moved by the noble Lord, Lord Taylor. He is suffering from a slight attack of hopefulness after dinner because, no matter which colour they are, all British Governments have suffered from delusions over the common agricultural policy and its reform. All British Governments have argued for reform but, I am afraid, have never got anywhere.
	The CAP still consumes some 45 per cent of the total EU budget, to which we contribute disproportionately. Our last shot at reform was during the EU presidency when the then Prime Minister, Tony Blair, agreed to give up quite a lot of our hard won rebate in return for reform of the CAP. Of course the reform just turned into a "health check". Our partners in Europe must have had their fingers crossed. The health check consists at the moment of: "Let us see the colour of British taxpayers' money. Yes, that is okay; they are still paying a whole lot of money. What about French agriculture? Open wide. Yes, that is all in perfect working order as well. Health check complete". We are still paying and the French agriculture sector is still receiving. The result is that British taxpayers are still shelling out enormous amounts of money, still shovelling billions a year into the EU budget that is so riddled with fraud and irregularities that its accounts have not been signed off by its own auditors for 13 years. That looks like another classical government winner on the lines of Gordon Brown's sale of gold at the lowest point in the market for 100 years.
	The French are a little bit more rational about this sort of thing—or self-interested, depending on your point of view. The French Minister Michel Barnier is on record as opposing any reform to the CAP. Using food security as an excuse for more protectionism, he has gone as far as suggesting—I think I saw this in the Financial Times—that the CAP should be taken out of the Doha round of the WTO talks. He is on record as saying that the CAP is a good model and that the CAP should return to its food production subsidies. Do the Government agree with Mr Barnier or do they think that the N in his name should be replaced with an M and agree that it is absolutely barking mad to spend 45 per cent of the EU budget on the 5 per cent of the population that produces 3 per cent of the EU output? I should like some idea of whether the Government think it is still a very good idea to spend this sort of money.
	The noble Lord, Lord Taylor, asked where the Government are on all this. I have news for him—the debate is going on without us. A report in the Times on 26 April noted that Germany is backing French proposals to maintain direct agricultural subsidies after 2013, which is when Britain and some other more market-minded EU member states want total reform of the CAP. The German Minister of Agriculture, Herr Seehofer, said:
	"Food security is a demand of our population".
	He did not see how this could be done,
	"by taking away subsidies from European farmers".
	Absolutely no surprise, then, that Germany has joined France in opposing the concessions on farm subsidies that Mr Peter Mandelson, our very own Trade Commissioner, is proposing to make at the Doha round. That is now being opposed by the French and German Governments. I do not know whether the British Government are in a strong position to argue that one through and get their way.
	The French press agency, AFP, tells us that Berlin and Paris are ready to join forces in opposing British attempts to reform the CAP. This is welcomed by a spokesman for the European Commission, who said:
	"When the French and the Germans talk on European issues and European interests, it is always good for Europe".
	Note that they did not say that it is always good for Britain. For those self-deluding British politicians who for years have been telling us that Europe is going our way, this must be something of a wake-up call. This is state intervention and state protectionism all rolled into one—these so-called reforms of the CAP which are being opposed by France and Germany, who have always called the shots. But this is the CAP, invented as a conduit for pouring money into French agriculture. It is entirely predictable that the Franco-German motor is exploiting a perceived food shortage to continue to advance an agenda which has existed for decades and which shows no signs of running out of energy or of money, even if it is our money.
	These are the CAP chickens coming home to roost at last. Successive Governments have handed over our agricultural, farming and food policies to the European Union. We are now at the mercy of the Commission, the European Parliament—if this treaty goes through—and the Council of Ministers.
	I speak now not as a swivel-eyed Europhobe but as an advocate for the Government's position, as I understand it from today's Financial Times, which says that the Chancellor, Alistair Darling, wants to scrap EU external tariffs, which inflate prices for commodities such as beef and dairy products, and end all direct payments to farmers. The FT quotes him as saying:
	"It is unacceptable that, at a time of significant food price inflation, the EU continues to apply very high import tariffs to many agricultural commodities".
	Mr Darling is right in saying that, but it does not end there. He goes on to say that the CAP costs consumers in Europe billions of pounds a year in higher food bills while hurting farmers in the developing world. The German Agriculture Minister has dismissed that as "complete rubbish". Do the Government agree with Mr Darling, the Chancellor, or with the German Agriculture Minister that the reforms of the CAP that Mr Darling is proposing are complete rubbish?
	The amendment is sensible. It is crazy that the Government can support the idea of giving the European Parliament, which is currently mired in sleaze—brilliantly exposed by the Liberal Democrat MEP Chris Davies, and I am still waiting for a tribute from the Liberal Democrat Front Benches to his energy and bravery in exposing that corruption—any role at all in a co-decision on the CAP. It has historically been against reform, as the noble Lord, Lord Taylor, said, and has blocked it, so to allow this to go through would be completely crazy.
	This is a classic argument for getting out of the mess of the EU. We are never going to get anywhere on agricultural reform while we remain bound to the ruinous, discredited policies of the CAP. I warmly support the amendment put forward by the noble Lord, Lord Taylor.

Lord Teverson: I warmly welcome the thanks of the noble Lord, Lord Willoughby de Broke, to Chris Davies, who is indeed doing important work on the way that expenses work in the European Parliament, much as many of my honourable friends are doing in the House of Commons. The expenses regime in the European Parliament, as in the House of Commons, needs to be changed and made transparent; I agree with the noble Lord on that. I was with Chris Davies MEP at the end of last week and congratulated him on his good work.
	We agree on all sides of the Committee that there needs to be continued reform of the common agricultural policy. As the noble Lord has said, the Government themselves have a fairly radical agenda in that area. It would be useful, though, if we got some of the historical facts and the context right at the same time. First, the common agricultural policy is, wrongly, a huge proportion of the total EU budget. It has gone down—currently it is around 40 per cent—but it is important to remember that the EU budget is something like 1 per cent of the total EU GDP, which makes agricultural support throughout Europe from all nation states something like 0.5 per cent of GDP. That is probably significantly less than in some areas of industry where the single market, competition policy and state subsidy have not worked well enough.
	I agree with a number of the criticisms that the Conservative Front Bench made of the single market and its inability to complete the process that started some time ago. That needs to continue. We have to accept that if we are in a single market for agricultural produce, the last thing that I would want for farmers in my area, the south-west, is greater inequality in subsidy between agricultural regimes. Within a single market it is quite clear that states such as France and new states in eastern Europe would subsidise agriculture far more than any UK Government ever would. That would be to the direct detriment of British farmers.
	There is another area, which we have to put in some context. All of us would probably agree that the reforms of the CAP have not gone far enough, but let us not mistake the fact that the changes that happened through Agenda 2000—and all the other changes that took place when the current policy came in, in the early 2000s—were major changes. The European Union has moved substantially away from production subsidies, to other areas in terms of environmental cross-compliance and rural policy. All of us, particularly on these Benches, would agree that that process has not gone far enough, but to say that there has been no reform of the common agricultural policy would be absolutely wrong. What we do not have now, in terms of the food security issue, are grain mountains and butter mountains. With the change of the Common Market organisation on wine, a number of those areas are changing as well. Do they go far enough? No, they absolutely do not. I think we would all agree with that. While there is a single market, and some payment to farmers, I would be interested to know if other political parties are advocating a total free market in agriculture, with no subsidies whatever. If that is the case, they should make that very clear in their manifestos at the next general election, whenever that is.
	I am particularly struck by the Conservative Front Bench view on the involvement of Parliament in the common agricultural policy. From the standpoint of the noble Lord, Lord Willoughby de Broke, the European Parliament is probably an institution beyond redemption because of corruption, so he would have a valid argument. I cannot understand why any party that fundamentally agrees with democratic accountability would not agree that something as central to the European Union—outside the areas that are always exclusive for policy, such as defence and foreign policy—should not be part of the European Parliament's serious responsibility. That denies democratic accountability; it denies the fact that there is no taxation, or expenditure of tax by budgets and institutional budgets, without democratic accountability. I cannot see how you get away from that.
	One of the things that I would argue about the agricultural committee—I give way.

Lord Willoughby de Broke: The noble Lord may have made a small mistake; he may have confused me with a Member on the Conservative Benches. Of course, I am not. I am UKIP. The noble Lord, Lord Lamont, has asked me to make that clear, which I do with great pleasure. Secondly, I do not see why the European Parliament should have a role at all in democratic accountability. It is not its money. It is our money that is being disposed of, so cavalierly, by the Commission and, under these proposals in the treaty, by the European Parliament. The European Parliament has nothing to do with it at all.

Lord Teverson: I agree absolutely with the noble Lord about that: taxpayers' money is exactly that. It is taxpayers' money, whether it is that of the Exchequer within the United Kingdom, or at the discretion of the Scottish Parliament or that of the European Parliament and European institutions. Clearly, the money comes from us as individuals, whether as businesses or other legal entities. I think that we agree on that. It is true at UK Parliament level and at European Parliament level.
	I believe strongly that there needs to be democratic accountability at European level. The European Parliament is a great institution. It is not a perfect institution by a long way, as the noble Lord said. During my time as an MEP, I remember that the noble Lord, Lord Tomlinson, was one of the most effective MEPs, especially with regard to the Committee on Budgetary Control, calling to account the expenditure that we are discussing. It is absolutely wrong that some 40 per cent of the European budget is not fully accountable to the European Parliament. That will change under the treaty of Lisbon.
	There is a real issue about the agriculture committee, which is chaired by a Conservative Member of the European Parliament, Neil Parish, and any criticism of that committee must reflect on him. If you do not give a committee of a Parliament any real power, you should not expect it to attract the most competent MEPs. It will not exercise authority because it does not have great authority. The same is true of the Committee on Fisheries, of which I was a member. Perhaps I was not the right person to undertake that task. We need democratic accountability. It is not just about committees driving decisions. All committee decisions on legislation, and certainly on budgetary matters, are examined in different areas but all come before the Parliament. I do not believe that the European Parliament holds the agriculture interest groups in particularly special regard. This change in the way in which Europe works will result in greater democratic accountability and greater accountability of the agriculture budget.
	As I said on Second Reading, if any European Union institution acts behind closed doors and in a non-transparent way, which is to be changed under this treaty, it is the Council of Ministers, where even in legislative session deals can be done that are not made public. That will change and this whole area of agriculture and fisheries will become far more transparent and accountable. Better decisions will be made. It may take time but I am sure that these bodies will become far more democratically accountable than they are at present.

Lord Tomlinson: It is a great pleasure to follow the noble Lord, Lord Teverson, to whom I am grateful for his generous personal remarks. He explained the policy areas in the CAP extremely well. I merely emphasise one of his challenges. The Opposition criticise this area, but are they in favour of a complete free market in agriculture or do they see any role for subsidies? If they are in favour of subsidies, should they all be done at the national level or is there room for a European Union subsidy, albeit of a different nature to what we have today? The one thing that is absolutely clear—

Lord Willoughby de Broke: May I—

Lord Tomlinson: No. I listened with great patience to the noble Lord and I shall not give way at the moment. I have hardly said a thing and I am not giving way. This is far too frequently being turned into a dialogue involving only whichever UKIP Member happens to be walking around, leaping up and thinking that he has inquisitorial rights in the Committee. I am not prepared to concede to them.
	The point that I was trying to make is that nobody in this House defends the CAP as it stands. It is clearly not a sensible mechanism with which to organise European agriculture. It was a sensible mechanism in the days when the treaty of Rome was written, when the greatest geopolitical problem that Europe had was the security of its food supplies. As we moved towards self-sufficiency commodity by commodity and failed to change the CAP, it became a less and less relevant way of organising European agriculture.
	However, whether we should support the CAP today is not the question in the amendments. The most important question being raised in the amendments is whether there should be a role for the European Parliament. One of the important things that the treaty of Lisbon does is abolish the distinction between compulsory and non-compulsory expenditure. As soon as that happens, for the first time ever a real power is being given to the European Parliament, which has been able to indulge in every sort of unaccountable nonsense discussion because it had no power whatever over non-compulsory expenditure. In the debate so far, we have failed to realise that the people who have had the exclusive priority of determining agricultural policy—the Council of Ministers—have made a mess of it and have largely to be held to account by a European Parliament that will have equal say over the distribution of agricultural expenditure.
	The CAP is not supported by anyone. It needs to be reformed. I believe that the engagement of the European Parliament through the abolition of the distinction between compulsory and non-compulsory expenditure will be the greatest impetus for change that we have before us. In those circumstances, for noble Lords to describe the European Parliament as the last bastion resisting reform—or, as one noble Lord said, as totally against reform—is a caricature of the reality. Once the distinction between compulsory and non-compulsory expenditure is abolished, the European Parliament will see agriculture in contraposition to all the priorities that it espouses—environmental policy, social policy, regional policy and so on—and on which it has been pressing for greater expenditure. It will realise that, with a capped budget, the only way in which it can gain more expenditure on social policy, on common foreign and security policy and on regional policy is by making sure that it exercises its responsibility for adequate controls on agricultural expenditure. That policy will be the driving motor for the necessary change in that area.

Lord Williamson of Horton: I, too, would not wish to see the words "European Parliament and" excluded from the Bill as proposed in Amendment No. 40. I take the view that the European Parliament's intervention in agricultural matters as a result of changes in the budget system that give it some real power that it did not have before is likely to be positive for changes in the agricultural policy of the Union. I do not take the view that the European Parliament is a wholly conservative body that wishes to retain exactly what we have now. The facility to move money between one part of the budget and another will be an important element of the way in which the European Parliament looks at agriculture.
	We are out of date in looking at the Parliament as a body that will retain the agricultural policy exactly as it is now. I attended more than 100 meetings of the Agriculture Council and eight marathons normally lasting two or three days and nights and I am still here, but not much change was made in the common agricultural policy in consequence. I would have expected to have a bigger change as a result of parliamentary input. We are out of date and we should welcome parliamentary input.
	Finally, it is important while criticising the agricultural policy, as many of us do, to be realistic about one or two of the changes that have been made. There is quite an important change in the agricultural policy, in that it was a market intervention mechanism practically across the board, which pushed up prices to consumers. That happened over many years. That element has practically vanished. If you look at the accounts now, you will see that the amount of money devoted to intervention in the market is extremely low and that there is little intervention in the market.
	The gainers are the consumers, who are not penalised as they were in the past by elements of the common agricultural policy. I attach a lot of importance to that; I think that it is just as important as the argument about taxpayers' money. They are both important points. There is still a heavy amount of taxpayers' money being put into agriculture—in my view, too much—but the intervention in the market has been sharply reduced compared to the situation before the changes were made. We should recognise that, because it is an important element for our consumers and for others in the European Union.

Lord Stoddart of Swindon: The noble Lord, Lord Teverson, challenged the Conservative Party—and others, presumably—to say whether it wants a free market in agricultural products. I think that New Zealand went for a free market in agricultural products and made a great success of it. It may very well be that that is another policy that the Conservative Party will put forward before an election before the Labour Party gets hold of it. As I shall show in a moment when I quote further from today's report in the Financial Times, the Government seem to be moving in a direction that many of us over many years have urged them to do, although so far they have not gone our way.
	The CAP has undoubtedly been a disaster overall. I remember when we were fighting those battles long ago about whether we should join the Common Market that the people who were most in favour of our joining were the farmers. They were in the vanguard. The NFU was a government supporter and helped the Government to persuade farmers, who were much more important then in our economy than they are now, that they should go in. By heaven, a lot of them now regret that decision, because since we joined the common agricultural policy about 500,000 farmers have left the farms and our agricultural production is not what it was. It has been a disaster in other ways as well. The Treasury tells us that the CAP costs every family in this country £18 a week more in food costs than they would need to spend if we were not in the CAP.

Lord Hannay of Chiswick: I am grateful to the noble Lord for giving way. I have slightly lost my place in the Order Paper; I am a little unclear which amendment he is speaking to. Could he perhaps say? I am not aware that the treaty of Lisbon establishes the common agricultural policy.

Lord Stoddart of Swindon: The one good thing about the Lisbon treaty is that it gives us an opportunity to talk about important things that perhaps we do not tackle too often in our debates. The amendments refer to agriculture and the role that the European Parliament might have in the future, so we are perfectly entitled to discuss it.
	We have had many good speeches and the European Parliament has been ably defended by two former Members of that body, but I wonder whether it is worth defending. I refer to the article in the FT today. I have been itching to find something with which to support the Government and this article gives me the opportunity. I will quote three paragraphs. The headline is, "Chancellor fires blast at EU's farm policy". The article says:
	"The chancellor will urge fellow European Union finance ministers to support the dismantling of the CAP, saying it is costing EU consumers billions of pounds a year in higher food bills, while hurting farmers in the developing world.
	In a strongly worded letter, Mr Darling calls current EU farm policies 'unacceptable'. He urges an end to direct support for European farmers and all measures that keep farm prices above world market levels.
	The chancellor also repeats Britain's insistence that Europe must review its target to increase the use of biofuels to 10 per cent of fuel use. He believes that this could be forcing up food prices in developing nations".
	That is one of the best condemnations of the CAP that I have heard for a long time—and hooray for that. It would appear from what the Chancellor is recommending to his European colleagues that he, too, believes in a free market in agriculture. We are moving together. The Chancellor of the Exchequer, who should know what he is talking about and in my view does, is talking sound sense that many of us agree with—including some on the Liberal Democrat Benches, who are very well disposed to the European Union. It seems that all sides are coming together to the view that the CAP is a ruinous policy—for Governments, for people and for the developing world. We are coming together in the hope that we can get rid of this absurd policy and find a market solution to the agricultural problems that we have, and to the food shortages and price increases that we will face in future, which cannot be found as long as we have the CAP.

Lord Pearson of Rannoch: I also support these amendments, because it does not seem possible that the European Parliament will do anything to improve the common agricultural policy. It is too firmly engaged on the European gravy train to upset its direction and jeopardise the comforts that it enjoys from it.
	Noble Lords may have noticed a quotation in the Times on 21 April, from an unnamed British diplomat who is supposed to be close to these matters in Brussels. He said:
	"You cannot spend 45 per cent of the EU budget on 5 per cent of the population who produce 3 per cent of the EU's output".
	Economically, as other noble Lords have said, the CAP is madness. The Government have said that it costs the average British family about £1,000 a year in higher food costs. We should not forget that those higher food costs come through the increased price of milk, sugar and bread, and hit the poorest hardest.
	However, it is beyond our shores that the CAP must be held to account. If we are to believe the Trade Justice Movement, CAFOD and Oxfam, the common agricultural policy has been killing untold numbers of people in the developing world, mostly children, by dumping its unwanted produce on those impoverished people, because they cannot sell their products in their local markets. I have a question for the Minister: have Her Majesty's Government made any estimate of the extent of this suffering? What is the number of people who have been affected in this way in recent years? I accept that US grain subsidies and grain exports compound the problem, but we are responsible for the common agricultural policy, because we are part of the European Union and, therefore, we support that policy.
	Then of course biofuels come on top of all this. They are perhaps not strictly part of the common agricultural policy, but the EU, in its absurd quest for environmental change and altering our carbon footprint in the useless pursuit of affecting global warming, is clearly proposing to use land that would be better used for growing food. I say "useless", because we now know that the planet is cooling down, and will be for at least the next 12 years—maybe the next 50 years. I pray in aid the Hadley curve. Anyway, we are not talking about that now.

A noble Lord: Oh!

Lord Pearson of Rannoch: Well, we have just had the coldest winter in the northern hemisphere since records began. We are told by the global warming enthusiasts that it is just an aberration and that it proves their point and their theory, but of course it does not. Time will tell, but simply to laugh off the idea that global warming may have ceased or be on the retreat is perhaps a little arrogant of noble Lords, from whom I would have expected better.
	I have another question for the Minister. Can he tell us of another industry that is paid for doing nothing, apart from many of the non-productive employees in our state sector? What other industry is paid this sort of money to do nothing, through set-aside and the single farm premium payment, while doing such colossal environmental damage? I would be grateful if the government Front Bench could come up with an answer.
	I come to the noble Lord, Lord Teverson, who admits that we need continued reform of the CAP. As my noble friend Lord Willoughby de Broke points out, Europhiles and British Governments have been saying that for years, but nothing has happened. I have the same question for the Minister that he did not answer previously. Does the noble Lord, Lord Tomlinson, wish to say something from a sedentary position? No, he does not.

Lord Tomlinson: The noble Lord is holding us spellbound.

Lord Pearson of Rannoch: I am very glad that the noble Lord is spellbound, but I very much hope that his Government will, on his behalf, be able to answer the questions that he does not face. I ask the noble Lord, Lord Bach, to answer the same question in relation to the common agricultural policy that I asked on the common fisheries policy, which he did not answer. Why can this wicked policy not be changed? What is happening in Brussels with the common fisheries policy and this policy? Which countries are holding up that change? Such discussions may well be secret in the enclaves and procedures of Brussels, but it would be helpful to the British people if they knew why this policy could not be changed.
	The noble Lord, Lord Tomlinson, said that the European Parliament would be immensely helpful in this regard—I maintain that it will not—and that the Council of Ministers had made a mess of this over the years. But, surely, if change were to come, it would have to be proposed by the Commission in secret. It would have to be negotiated in COREPER and then passed by the Council. The noble Lord, Lord Tomlinson, shakes his head but I have to ask him whether that procedure occurred with proposed reform of either the common fisheries policy or the common agricultural policy. I suggest that it has not.
	The position of the UK Independence Party is that if we left the European Union, which we should do, we would run our own agriculture to suit ourselves and stop being part of this evil on the face of the planet. I simply ask: how dare the European Union propose to lead the way on environmental policy for the good of the planet when it has been responsible for this for so many years—and why can it not be abolished?

Lord Bach: I am grateful to the noble Lord for moving his amendment and speaking to the other two.
	Amendments Nos. 40 and 41 refer to the extension of codecision to certain aspects of agriculture and fisheries policy-making. The ordinary legislative procedure—qualified majority voting and codecision—will now be the default decision-making procedure for agriculture and fisheries matters, as it has been for the environment for some time. Agriculture and fisheries policy is already subject, as the Committee will be aware, to qualified majority voting. However, the Lisbon treaty introduces codecision to this area involving the European Parliament.
	We have to decide where we stand on that. We believe that the European Parliament fulfils a vital role in the European Union. Its Members are directly elected, perform a very important role of scrutiny and hold the Commission to account. Even those who are sceptical about the role of the Parliament should be grateful for that because they are even more sceptical about the role of the Commission. MEPs are increasingly effective, both at raising issues of key concern—for example, climate change in recent times—and at scrutinising and improving legislation.
	Strengthening the European Parliament's role increases transparency and democratic accountability. Our EU Select Committee report noted in paragraph 10.36 in relation to moving to codecision on agriculture and fisheries that:
	"It will bring more transparency and accountability to the policy-making process, allowing third parties to raise concerns more easily with policy makers and facilitating national parliamentary scrutiny".
	Experience in areas already subject to codecision—I have mentioned environmental policy already—has shown that proposals can be improved by the involvement of MEPs. The additional scrutiny and debate in the European Parliament will offer new opportunities for us and other member states to secure, frankly, better regulation.
	If I may walk down memory lane for a brief moment, in a previous role as a Defra Minister I saw for myself the valuable input that can be given on legislation by the European Parliament. There are people in Committee tonight who will well remember REACH, which implements a new EU regime for regulating the risks to human health and the environment from hazardous chemicals. That was greatly improved through the interplay between the Council and the Parliament.
	Thanks in part to codecision, the final REACH proposal was more in line with the principles of better regulation and provided higher protection against the most harmful chemicals. The procedure also provided greater opportunity for scrutiny and a wider debate than would have taken place between industry and the interest groups involved. We as a country have a lot of experience of dealing with the European Parliament and will certainly draw on that—and, indeed, on what we consider our good reputation—when it comes to engaging it on agriculture and fisheries.
	Of course, it is too early to say what the precise effects of these changes will be on reform of the CAP, animal health and welfare or fisheries policy in the EU. The reason for that is that, to be successful, the reform must take into account the political make-up of the European Parliament as well as the Governments of the member states that sit in the Council. However, the current signs in relation to the common agricultural policy health check are promising. The draft opinion of the Parliament's rapporteur on the health check includes many issues with which the UK would agree, including some dismantling of market-supporting regimes.
	I note that the weight of evidence given to the EU Select Committee was favourable. Professor Simon Hix of the LSE, a leading expert on European Parliament voting patterns, suggested that surveys of MEPs had shown that in fact an overwhelming majority in the European Parliament was in favour of reforming the CAP. Professor Helen Wallace agreed that transparency of decisions would be increased by codecision. She believed that, in the past, Ministers of Agriculture,
	"have been able to operate as a collusive club with rather little external scrutiny and in a way which was not very easy for national parliaments to get any handles on either".
	We think that that is an important and well made point. Indeed, when my successor, my noble friend Lord Rooker, was interviewed about this by the Select Committee, he agreed that the process had been opaque.

Lord Pearson of Rannoch: The noble Lord touched on my question there. Which countries are blocking this reform?

Lord Bach: If the noble Lord will be patient, I assure him that I shall come to that.
	I remind the Committee that the Lords EU Committee unanimously concluded:
	"Much depends on the European Parliament itself, but the weight of the evidence suggests"—
	those are important words—
	"that the agriculture and fisheries committees of the European Parliament will in future represent, and be closely overseen by, a wider range of interests than the narrow ... interests that have historically dominated those committees. For these reasons, we expect that the change is likely to assist rather than impede further reform of both the common agricultural and fisheries policies".
	That is why we argue that there should be support from all round the Committee for this extension of co-decision.

Lord Pearson of Rannoch: Some of us have been hearing this for many years—in my case, since the Maastricht debates of 1992. We have always been told that it will be jam tomorrow with the common fisheries and common agricultural policies. The noble Lord has just referred to the narrow interests which have been blocking progress towards reform. I ask him again: what are those narrow interests? May we or may we not expose the countries which, in the Council of Ministers, block this reform?

Lord Bach: I do not necessarily refer to Ministers in the Council of Ministers when I quote our European Union Committee, which talks about narrow interests. I think that the noble Lord knows as well as I do to whom they may be referring.

Lord Pearson of Rannoch: I should really like to know what interests in Brussels prevent reform of the common fisheries and common agricultural policies.

Lord Teverson: Perhaps I may help. One major thing that stands in the way of reform is the fact that, as the noble Lord, Lord Tomlinson, said, the European Parliament has no control over the agricultural budget. As soon as it does have control, it will say that there are far greater priorities in the European Union, and I am afraid that money talks. With regard to the discussion about who initiates legislation, as the other House knows, one of the main controls over government is expenditure and working and controlling budgets. That is the key way that this will work, and the Lisbon treaty makes a fundamental difference in that area. I apologise for interrupting.

Lord Bach: I am grateful to the noble Lord, but I think I understood what the Committee meant. There are, however, some important exemptions where the European Parliament will not co-decide.

Lord Forsyth of Drumlean: I apologise for interrupting the Minister, but what is the answer to the noble Lord's question?

Lord Bach: Clearly, among the interests that are being referred to are some agricultural ones around the membership of the European Union. That answer is not particularly inspiring, but I would claim it was rather obvious.

Lord Pearson of Rannoch: I am afraid that is an inadequate answer.

Lord Bach: Will the noble Lord let me continue? There is much business to be got through tonight. On the agriculture side—

Lord Lamont of Lerwick: I apologise for interrupting the Minister, but could he explain something for those of us having difficulties in following the subtle implications of the answer? If these agricultural interests are strongly represented at the Council of Ministers level—presumably, because Ministers feel political pressure from public opinion and constituencies—why would that be different at a parliamentary level?

Lord Bach: We will have to wait and see how different it is, but the straws in the wind show, we suggest, a much greater move to readiness for reform among members of the European Parliament. We will have to wait until after the next elections, as I said, to see what the European Parliament looks like; my noble friend Lord Tomlinson argued so and the noble Lord, Lord Teverson, agreed with him. Yet the fact will remain that that Parliament, with its limited budget, will not be able to do the things that it wants if it continues to agree to spend too high a percentage of its expenditure on agriculture. We think that the pressures will be there on the European Parliament once it has some responsibility. So far, it has had none at all and its Members can say whatever they like; it does not matter. However, they will have some responsibility now and we very much hope and expect that they will act responsibly.
	There are some exemptions where there will not be co-decision. On the agriculture side, these include the fixing of market support measures such as intervention prices and import levies, while for fisheries these include limitations in the form of total allowable catches. Those are all responses to acute economic circumstances and inevitably require rapid reactions, which could not be guaranteed under the co-decision process. If the fisheries measure agreed annually in December were to be delayed then implementation in the January immediately following would be severely compromised and the measures unenforceable, threatening the long-term sustainability of the stocks. That exemption is therefore simply an example of the EU adopting a sensible and practical approach to the annual fisheries negotiations and other similar measures.
	I turn to Amendment No. 41A, which would require a statement from the Secretary of State on the Government's objectives for the CAP and the CFP. We very much welcome the European Union Committee's report, The Future of the Common Agricultural Policy, published in March this year. I have to declare something of an interest, as I was a member of its Sub-Committee D up until last November, but clearly not one when it formed its views and put them in writing. If I describe it, then, as a masterful analysis of the CAP's strengths and weaknesses, I am not boasting.
	As the Government have already indicated in their response, we share the key planks of the committee's conclusions on the direction of future policy, not least because they resonate so closely with the Government's own A Vision for the Common Agricultural Policy published, as noble Lords will remember, in late 2005. That envisaged a future for EU agriculture as a fundamentally sustainable industry, integral to the European economy. It ought to be internationally competitive without reliance on subsidy or protection; it should be rewarded by the market for its outputs—not least for good, safe food—and by the taxpayer only for producing societal benefits that the market cannot deliver. It should of course be environmentally sensitive. It should be socially responsible to the needs of rural communities. It should produce high levels of animal health and welfare and the non-distortion of international trade and the world economy.
	Our vision—our domestic view for farming—is of an industry that by 2020 is, first, profitable in the marketplace and continuing to produce the majority of the food we consume; secondly, making a positive net environmental contribution, particularly in respect of climate change, but wider than that; and, thirdly, managing the landscape and the natural assets that underlie it.
	Here the Committee will be at one. Further CAP reform is a key element of achieving both our domestic and our European visions for agriculture. Despite recent improvements, the CAP remains expensive, wasteful and inefficient at providing ongoing support to farmers. It distorts global markets, weighs farmers down with regulation and acts as a disincentive for farmers to improve their competitiveness.
	We call for an end to the market support and direct payment elements of the CAP by 2015-2020, because they damage developing countries, as has been said, are expensive and wasteful—costing approximately €50 billion per year—deliver poor value for money, and stymie the ability of EU farmers to respond to market signals and become truly competitive. That would represent a radical further evolution of the CAP: price support would gradually diminish as would other direct support to farmers; agricultural markets would progressively open up; and there would be a central rather than a peripheral role for rural development measures.
	CAP reform is currently being pursued on two key tracks. The health check, which has been referred to, promises worthwhile adjustments to current CAP mechanisms and should be concluded before the end of the year. It will not in itself reduce overall CAP spending, but the health check has the potential to deliver some beneficial change that clearly signals the ongoing nature of CAP reform in the direction of market liberalisation and the delivery of public benefits.
	In the longer-term, the EU budget review, which follows on from the health check, will consider all EU spending post 2013—the end of the financial perspective—and is likely to result in a high-level Commission White Paper in late 2008 or early 2009, before the Commission change-over, which will inform the negotiations for the next financial perspective, which ought to begin in 2010-11. Due to its size, the CAP will rightly be a key focus for the budget review, as will the UK and other countries' abatement.
	We want the CAP health check negotiations this year to play an important part in the reform process by reducing regulatory burdens and giving farmers greater control over their business decisions; cutting further the trade and market-distorting nature of the CAP; and directing public spending more towards delivery of targeted public benefits, particularly environmental ones. The Commission is due to publish its legislative proposals for the health check on 20 May. The noble Lord asked me about what would happen next. The proposals are due on that day. The Government will run a full consultation and the legislative proposals will be subject to the usual domestic scrutiny procedures.

Lord Taylor of Holbeach: Does that mean that we will have a debate on the draft report in this House, or are we to wait until the ideas are developed into legislation, and then presented to us with very little chance of our changing it? I think that the House would want the opportunity to debate the issue in full.

Lord Bach: The noble Lord knows what I am going to say; he is experienced enough to know that will be a matter for the usual channels to decide. I am sure he will be a powerful voice in that discussion.
	For all the reasons that I have set out—on which, in their attitude to CAP reform, I hope to gain consensus or fellow-feeling around the Committee—I do not believe that a statement as asked for in Amendment No. 41A would add anything new.
	I want to sit down because we have other important business to attend to. However, these are important matters, and the noble Lord, Lord Pearson of Rannoch, has been waiting a long time for what I am about to say. I am going to tell him who is on our side, or closer to our view, rather than those who are not, so he will have to work it out for himself. As well as us, at least eight other countries in the EU are what we now describe as reform-minded. They are: Sweden, Denmark, Netherlands, Germany, Estonia, Latvia, the Czech Republic and Malta. It is important to have allies in this important enterprise.
	Even among those who are not so enthusiastic for CAP reform we believe there is some recognition now that further reform is inevitable and that the budget will be cut substantially after 2013. There is also much common ground on much of the detail of the CAP health check, particularly the measures which reduce burdens on farmers, such as abolition of set-aside and simplification of direct payments.
	Finally, in a Financial Times article today my right honourable friend the Chancellor of the Exchequer is quoted calling for an end to direct support for European farmers and the abolition of all measures that keep farm prices above world market levels. The noble Lord, Lord Stoddart of Swindon, was kind enough to commend the comments that were quoted at any rate. I think that that shows quite clearly that the Government mean business. But as far as the Lisbon treaty is concerned—and I have to keep reminding myself that that is what we are debating in this House—I would invite the noble Lord to withdraw his amendment.

Baroness Byford: I would welcome the Minister's response on this section in the Bill. As a former Defra Minister, he knows very well what goes on in discussions in the channels across the water. The countries that he named as sympathetic, or as sharing similar aspirations to ours, did not include France. France clearly has a very different view on protecting its farming and agricultural industry, or it certainly did in years past. How does the Minister think the European Parliament will overcome that particular problem? The representatives there will be equally difficult and will rightly be fighting for their own farmers. That is not for us because we have gone down a different route. However, France is a big player among the other countries.
	I apologise to Members of the Committee; as I have not been participating in the debates I have not heard the earlier discussions on fisheries. One of the problems with the fisheries policy is that although there has been review after review, every time a committee in this House or the other place comes up with recommendation, nothing happens, or at least nothing successful. So we still have loads of discards. Is the Minister confident that the proposals in the treaty will achieve this, or will we continue to go down that particular route? It is a very unsatisfactory route and has not improved much over the years. There is still abuse out there and not much being held to account.
	May I also ask the Minister—

Noble Lords: Oh!

Baroness Byford: This is very relevant.
	My next question relates to the draft Marine Bill which will soon be before us. Will the European Parliament be able to override that legislation or have any say on it? Will it be a purely UK matter? It refers to waters around our own territory, to the devolved Administration in Scotland in the 12-mile limit and to the 200 nautical-mile limit. The European Parliament may well have a view in the longer term. What is the Government's view? Has the issue been considered? Can the Government give us any better assurance than the Minister has been able to give us already?
	In his last comments to us, the Minister told us that the health check, which is in progress at the moment, will not bring any immediate budgetary reductions. Can he say when he expects reductions in that budgetary commitment, because they are enormously important?
	Finally—

Noble Lords: Oh!

Baroness Byford: I am sorry that I am boring those on the Liberal Benches. I can only apologise, but these are important issues. The last issue that I want to raise is food security. I thought that Members on those Benches were interested in that. What confidence does the Minister have that the new arrangements will allow each of the member countries to be much freer than we have been in the past? We talked about the health check, but agriculture must compete in a world market, and I seek reassurance that the Government appreciate—I hope they have lobbied strongly enough—that the new arrangements will give us greater freedom. Those are my main issues, and I apologise if I have taken too much time. There are plenty more issues, but that is enough for tonight.

Lord Bach: It is a pleasure to debate again with the noble Baroness, who has great expertise in and knowledge of agricultural and farming matters. I shall answer her questions very briefly; I think that the Committee may want to move on. We do think that the new measures will help. How can one ever be sure? We do, however, think that they will. Co-decision, on balance, is certainly a good move and may help to break what has obviously been an unsatisfactory position until now. I can tell the noble Baroness that as the Marine Bill is national legislation, it will have nothing whatever to do with the European Union. On the health check, I said that it would not bring budgetary reductions. We will have to wait until the next financial perspective for substantial budgetary reductions to show themselves, but it is very important that the review in 2008-09 shows the way towards them. The negotiations that will begin perhaps a year or two after that leading up to 2013 will, we hope, lead to the reductions that we all think are necessary.

Lord Lamont of Lerwick: I have a question for the Minister that is not so much about agriculture as about his constitutional argument. He is saying that if the European Parliament were more involved, his best guess is that that would result in a more realistic attitude to reform of the CAP. He is saying that, if he is right, that will happen now. He is proposing—this goes into other areas and is a very important principle that we will debate elsewhere in our proceedings on the Bill—an increase in the powers of the European Parliament, and he is justifying it in this debate purely on the political outcome that it will have now and not on its merits per se. That is one of the dangers. These irreversible changes are made because they are to our advantage now, regardless of whether they will be to our advantage in the long term. That is one of the biggest issues in the whole debate on the whole treaty.

Lord Bach: Briefly, there may be advantages to us in what we as a country want from the CAP in the future as a result of co-decision. I started my speech—I certainly intended to—by saying that the European Parliament is a democratic institution. It represents by direct election a very large number of people in the 27 countries of the EU, so it is a good thing for the European Parliament's powers to be increased. I therefore rest my argument on two bases: one is the principal basis of it being a democratic institution; the other is that the results in this instance will be beneficial.

Lord Taylor of Holbeach: This has been a very useful area of debate on the Bill. It has certainly been wide-ranging. The noble Lord, Lord Hannay, challenged the relevance of some of the contributions, but that is surely the point.
	If the changes in decision-making do not improve the operation of the CAP, noble Lords are right to point this out. It is interesting that the Minister has adopted a wait-and-see—a sort of hope-over-experience— policy. My noble friend Lord Lamont had it right. This issue stretches right across our relationship here, in this Westminster Parliament, with European institutions.
	It is interesting that, in our discussion about a subject on which there is a large degree of consensus in the Committee, I have not heard a single noble Lord say that the common agricultural policy is underregulated. I have not heard a single noble Lord say that it is spending too little. We are all agreed that it desperately needs reform. When I asked about the role of this House and the debate that we might have on the health check, I got, quite rightly, a technically correct answer. However, when the Lord President introduced the Bill at Second Reading, she mentioned—I am sure that I did not mishear—that the role of national parliaments would be enhanced through the operation of this treaty. I hope that I am correct in that. If that is the case, why is it that we find ourselves unable to have much influence over this important area of policy?
	That is why these amendments are important. The Westminster Parliament, both this House and the other place, has a role to play. I ask the Minister: what is the role of this House and the other place in CAP reform? Perhaps he might answer that question before I determine the future of my amendments.

Lord Bach: Their scrutiny role, as far as the whole EU is concerned, is well known. Both Houses have an important scrutiny role. No doubt the views expressed both in this House and in another place on the issues that we have been debating tonight are listened to carefully by those in the Commission, by Ministers who represent this country on the Council of Ministers and, I am sure, by Members of the European Parliament. The role of national parliaments regarding the European Union is well set out and works pretty effectively as far as the UK is concerned.

Lord Taylor of Holbeach: That describes to my mind a spectator at a football match commenting on the skill of the referee in determining whether someone is offside. The truth is that, when it comes to decision-making, we have little or no authority on these matters. The reason why the CAP has failed or got itself into such a mess is simply that there is too little democratic influence on it. We were right to table these amendments. There is a role for Westminster in CAP reform. However, in light of the lateness of the hour and the rigour of the debate that we have had, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 41 and 41A not moved.]
	[Amendments Nos. 42 to 45 had been withdrawn from the Marshalled List.]
	[Amendments Nos. 46 to 47A not moved.]
	[Amendment No. 48 had been withdrawn from the Marshalled List.]
	[Amendment No. 49 not moved.]
	[Amendments Nos. 50 and 51 had been withdrawn from the Marshalled List.]
	[Amendment No. 52 not moved.]

Lord Kingsland: moved Amendment No. 53:
	Clause 2, page 1, line 12, after "excluding" insert—
	"(i) Article 2, paragraph 66, replacement Article 65 TEC (TFEU), paragraphs 1 and 2, relating to judicial cooperation in civil matters; and(ii) "

Lord Kingsland: I rise to move Amendment No. 53 and to speak to the remaining amendments in that line and to Amendments Nos. 57 and 59 to 61 in the next line. Under Maastricht—and some of your Lordships may be experiencing a certain nostalgia for the comparative clarity of that treaty—

Lord Pearson of Rannoch: I am sorry to interrupt but, according to my list of groupings, we have missed out the whole group of amendments starting with Amendment No. 46, which is on borders and asylum. I am surprised.

A noble Lord: Wake up.

Lord Pearson of Rannoch: It is not a question of waking up. I have woken up and I have drawn the matter to the attention of the Committee. I did not agree to this.

Baroness Ashton of Upholland: It is not a question of agreeing; it is for the mover to decide whether amendments should be moved. The noble Lords, Lord Kingsland and Lord Hunt, in responding to the question from the Chairman of Committees, said that they were not moved. The Committee allowed that to happen and we are now on Amendment No. 53. As the noble Lord, Lord Kingsland implied, we will go through to Amendment No. 61 and take two groups together.

Lord Pearson of Rannoch: It is possible for other noble Lords to move amendments but I do not intend to do so on this occasion. I am surprised, however, because I thought that we were all consulting one another on the process of these debates and keeping in touch. There is no point in involving the Liberal Democrats because they have no amendments. However, the rest of us are keeping in touch on timing and the order in which we take these matters, but no one informed me that we were going to leave out today the whole question of borders and asylum. I trust that we may come back to it on Report. The noble Lord, Lord Lamont, is urging me to move these amendments; he is, of course, free to do so himself. This slightly alters the understandings that we have tried to come to in order to finish by 11 o'clock tonight at the end of Amendment No. 53 or Amendment No. 57—I hope that we get there—and it may change the way that some of us behave in future.

Baroness Ashton of Upholland: The noble Lord should not look at me. What happened—as I shall explain to the noble Lord if he sits down—is that, when the amendments were called by the Chairman of Committees, the words "not moved" were said on the Front Bench opposite. At that point it was absolutely in order for the noble Lord, Lord Pearson, to leap to his feet and seek to move them. He did not do so. I was merely saying, by way of explanation, where I thought that we had got to. It was not a case of discussions going on; it was simply a case of where we had got to. The noble Lord can, of course, retable the amendments on Report. But that is what happened. I am merely giving him a factual explanation, nothing more.

Lord Pearson of Rannoch: This particular frog leapt with such speed that I was caught on the wrong leg and was not able to move the amendment in time. I merely put it down as a marker. I do not want to delay the Committee any longer, but if erstwhile noble friends on the Conservative Front Bench—or, indeed, the government Bench—are going to play this kind of trick in future, the rest of us would like to be informed. The Liberals are irrelevant because they have no amendments. I have nothing more to say on the group of amendments that have not been moved.

Lord Wallace of Saltaire: The Government have no amendments. I did not know that the Government were irrelevant to these Committee proceedings.

Lord Pearson of Rannoch: I should point out to the Liberal Front Bench that the Government are in charge of the business.

Lord Lamont of Lerwick: I did not know the Liberals were part of the Government.

Lord Pearson of Rannoch: I did not suggest that they were part of the Government. I merely said that the main parts of the Committee are trying to get the Committee stage through in an expeditious manner so that we can cover all the areas in a time that suits the Government's wider programme and so on. The leaving out of a whole group of amendments on no less a subject than borders and asylum came as a surprise.

Baroness Ashton of Upholland: Let me be very clear: the Government do not control the business in that sense. The noble Lord is correct in saying that the Opposition have put down amendments. However, they have chosen not to move them and to regroup; it is their choice. I am sorry if the noble Lord was not involved; I was just informed of that. It is a completely reasonable choice to make. The noble Lord is equally at liberty to choose what he wishes to do with his own amendments. He is quite correct: we operate in a spirit of harmony in an attempt to make this work appropriately. But, in the end, it is for those who are moving the amendments to make the best judgment based on what they think will work most effectively and, indeed, on the lateness of the hour. I have nothing but support for the opposition Front Bench for trying to do that as expeditiously as possible.

Lord Tomlinson: I warn my noble friend on the Front Bench that, if she goes out of her way to placate the noble Lord opposite for being so dozy that he does not hear what is going on when six amendments are not moved, she will be alienating me again.

Lord Kingsland: Having just made some observations about the relative clarity of the Maastricht treaty, I had assumed that the noble Lord, Lord Pearson of Rannoch, had leapt to his feet to contest that proposition. In that sense I was rather relieved to find that he was on an entirely different point.

Lord Pearson of Rannoch: I am sorry, but I just point out that we removed Amendment No. 33 completely from the Marshalled List this evening and we agreed that with everyone in the spirit of what we are all trying to achieve. The noble Lord's point is not well made but he had better carry on with what he is doing now, I suppose.

Lord Kingsland: It has just been drawn to my attention by noble friends on the Front Bench that Amendment No. 55 has not yet been called; and if the noble Lord, Lord Pearson, glances at his text, he will see that it partially covers the area of immigration. So the noble Lord's opportunity to dilate on this matter tonight, should he so wish, is not wholly undermined.
	As I was about to say, under the Maastricht treaty Home Office, justice and police matters were dealt with under what was then called the Third Pillar, and that pillar was intergovernmental in character. The treaty of Amsterdam, as many of your Lordships may recall, moved immigration, asylum, border control and civil and family law from the Third to the First Pillar, which operates, as every one of your Lordships participating in these debates over the past weeks must know, on the basis of co-decision by the European Parliament, qualified majority decision-making in the Council and subject to the ultimate jurisdiction of the European Court of Justice. As a consequence of this, the Third Pillar was renamed Police and Judicial Co-operation in Criminal Matters and has so remained for the past decade. The treaty of Lisbon brings all the remaining Third Pillar matters under Pillar 1 and that is the central issue that your Lordships have to consider tonight.
	The great political philosophers tell us that fundamental to the creation of states is the need for individuals in societies to be secure. That security is achieved by the prohibitions of the criminal law enforced by the police. For the European Union to take upon its own institutions the responsibility of passing criminal legislation and ensuring that it is implemented in member states on the scale suggested in the Lisbon treaty will have a defining impact on the European Union's ultimate political character. We therefore have to ask: what is motivating those who press for these radical changes?
	The new provisions are set out in Articles 82 to 89 of the new treaty. It is simply not possible to deal with all of them without occupying your Lordships for several hours. I shall just draw your Lordships' attention to a few of the more alarming proposals.
	Article 83(1) provides for the adoption of European Union legislation to establish minimum rules concerning the definition of criminal offences in areas of particularly serious crime with a cross-border dimension. The list includes terrorism, trafficking in human beings, the sexual exploitation of women and children, drug trafficking, arms trafficking, money laundering, corruption, counterfeiting, computer crime and organised crime. Moreover, the Council may, after obtaining the consent of the European Parliament, adopt a unanimous decision to include other areas of crime as well.
	Article 83(2) provides for other criminal offences and sanctions where this proves, in the words of the new treaty,
	"essential to ensure the effective implementation of a Union policy in an area which has been subject to harmonisation measures".
	The treaty goes on to specify that directives under this article are to be adopted by the same legislative procedures as are stipulated for the adoption of the harmonisation measures in question. So if a harmonisation measure were adopted by qualified majority voting, so would the related criminal offence and sanctions be.
	Article 85 provides, inter alia, that Eurojust may be given the task, by the Council and the Parliament, of initiating criminal investigations as well as proposing the initiation of prosecutions and co-ordinating such investigations and prosecutions. Article 86.1 permits a European Public Prosecutor to be established in order to combat offences and acts against the financial interests of the Union. That decision would be taken by a unanimous vote in the Council. The related Article 86(2) provides that the European Public Prosecutor's Office shall be responsible for investigating, prosecuting and bringing to judgment the perpetrators of offences against the Union's financial interests. Article 86(4) allows the European Council, acting unanimously, to adopt a decision extending the powers of the EPP to include serious crimes having a cross-border dimension.
	Lastly, Article 82 lists three aspects of criminal law that could be subject to harmonisation: the mutual admissibility of evidence, the rights of individuals and the rights of victims of crime. This latter category goes to the heart of individual liberties. It has a substantial overlap with the rights laid down in the ECHR and falls within an area where our own common law traditions differ substantially from the civil law provisions of our continental counterparts.
	All this represents a remarkable break with the Maastricht model. Why has the Community—or those who have been driving the policy behind the treaty—made this radical break with the past? Many people in the European Commission, I understand, argue that this expansion of criminal responsibilities in the Community is the logical corollary of the freedom of movement of people. Without Community measures in this area, they argue, people would be able to escape justice by exercising their power to move freely throughout the Community. However, surely that task is addressed by the European arrest warrant. Its admittedly unattractive and unnecessarily draconian provisions nevertheless ought to solve 99 per cent of this problem. There is no logical reason for any harmonising measures.
	Not surprisingly, the scope of these provisions has made some of the member states—that is to say, member states other than ourselves—hesitate as well; hence the emergency brake provision. Measures proposed under certain articles in the Lisbon treaty, where decision-making is enacted by qualified majority voting, are subject to these brake provisions. In these circumstances, any member state can pull its emergency brake where it considers that the draft legislation would affect fundamental aspects of its criminal justice system. As a consequence, the matter is then referred to the European Council and the legislative procedure is meanwhile suspended. Where no agreement is reached in the Council, the legislative procedure remains suspended; but if at least nine member states wish to proceed, then after notifying the Commission, the Parliament and the Council, authorisation for enhanced co-operation is deemed to have been granted.
	If these measures go ahead in their current form, we are likely to see the enhanced provisions used frequently. This will lead to many member states in the European Community operating a set of criminal justice rules that are different from the remainder. Would it not be much better to proceed, as indeed we did under the old Third Pillar arrangements in Maastricht, with negotiations going on until consensus is reached? In those circumstances the Community would have a level playing-field in matters of criminal law.
	The relevance of the emergency brake procedure is reduced in the case of the United Kingdom, because of the protocol negotiated, which gives us the right not to opt in to individual measures. At present, the unanimity requirement in criminal justice obviates the need for any opt-in in this area. Under the treaty of Lisbon, as noble Lords are aware, the United Kingdom and Ireland have secured the right to choose whether opting in to all proposed measures falling within the field of freedom, security and justice is an appropriate approach in any given set of circumstances.
	The protocol also confirms the right of the United Kingdom to choose whether or not to participate in the proposed amending measures. Opt-in provisions will apply to amending measures, as well as the original measure itself. However, by Article 4a(2) of the protocol, when the Council determines that the United Kingdom's non-participation in an amending measure makes the existing measure inoperable for other member states, it may, by qualified majority, require the United Kingdom to reconsider its decision not to participate. If the United Kingdom maintains its position, the existing measure shall cease to apply to the United Kingdom. But, by Article 4a(3) of the protocol, the Council may, again by qualified majority, determine that the UK shall bear the direct financial consequences necessarily and unavoidably incurred as a result of its exclusion from the existing measure. I should like to ask the Minister how we came to agree to this. Quite apart from the desirability of having a measure of this sort in the protocol, how on earth could we possibly know in advance what the likely scale of our liability could be? Can the Minister be confident that the scale would be small, if not derisory?
	The other problem in relation to the opt-in which is extremely vexing is that we have to take the decision to opt in at a very early stage of the negotiations. The early negotiations in relation to a particular measure may make what is likely to be the end product desirable. We exercise the opt-in and then the whole character of the negotiations changes and we realise that, for one reason or another, it would be damaging to the interests of the United Kingdom to exercise our opt-in. By then it will be too late to think again. As a consequence of this aspect of the opt-in provisions we are likely to be exceedingly hesitant to get involved at all in most circumstances.
	Your Lordships will be extremely relieved to hear that I am turning to the final matter, which is the protocol on transitional provisions. Article 9 of this protocol provides that the legal effects of the measures adopted under the old Third Pillar, such as the arrest warrant, shall be preserved until those Acts are repealed, annulled or amended. Following the coming into force of the Lisbon treaty—if that ever happens—it is likely that the Commission will move swiftly to convert many such measures into directives under Title V of the TFEU. The transitional arrangements upon which the UK Government have insisted—inexplicably in my view—will last for only five years. We have apparently negotiated these special arrangements to ensure that where measures have not already been converted from the Third to the First Pillar, the Government can exercise what they describe as a block opt-out with respect to the remaining unconverted measures. Under Article 10(4) of the protocol, the United Kingdom may, six months before the expiry of the transitional period, notify the Council that it does not accept the new extended competences of the EU institutions over any outstanding Third Pillar matters.
	Once again, though, we are faced with a system of financial penalties in this area. I pose the same question to the noble Baroness as I did earlier in relation to the opt-out protocol. How can the Government be so confident that these financial requirements that will be imposed on us will not be extremely expensive?
	I think I have said enough to indicate that the scale of these new provisions in comparison with what has gone before is immense. The new powers of the Community are of particular concern when it is taken into account that their ultimate character will be determined not by our own courts but by the European Court of Justice. It is for those reasons that we have tabled these amendments. I beg to move.

Lord Blackwell: I have no doubt that the measures that my noble friend has just explained are some of the most far-reaching and chilling proposals in the whole treaty. As they are understood by the population at large, they will cause outrage. What my noble friend described was, as he said, the abolition of the intergovernmental nature of these justice and home affairs measures and their incorporation into the main treaty in a way which will bring in QMV, the jurisdiction of the European Court of Justice and co-decision by the European Parliament.
	Matters of criminal justice and policing are matters for a nation where the electorate can elect or de-elect the Government who are responsible for those matters. The electorate can hold that Government to account. They can elect or de-elect the parliament that makes those laws on their behalf. I do not believe that a European council voting by majority is democratic representation of a nation. Nor do I believe that a European Parliament, however much language is used about it directly representing European citizens, represents a national voice on these matters or is an appropriate forum to decide the national laws that apply in this country.
	The European Union is not a nation. The United Kingdom is a nation. Its Parliament is the place where criminal laws, policing laws and the role of justice in this nation are decided until such time as the Government tell us that we are no longer a nation and the European Union has become that nation—a proposition which, thankfully, they continue to deny. The fact that this treaty moves us away from a nation having control over its own laws in this area is a hugely significant matter. In support I quote a much-quoted report from the European Committee of this House, which has made some salient points on the matter. It said:
	"The move to QMV in almost all areas of FSJ is a significant change ... It is likely that one effect of the change will be an increase in Union activity and the volume of legislation agreed in this area".
	The European Union has not brought in these measures in this treaty to sit on the sidelines; it has brought them in to legislate in these areas. That is what it intends to do. The report continues:
	"The change will remove Member States' vetoes in respect of criminal law and policing and legal migration. This means that it will be possible for the UK, in some cases, to be bound by a measure in the area of criminal law or policing against its will, although the likelihood of this happening will be greatly reduced by the existence of a general right not to opt in for the UK".
	I will return to that point in a minute. In respect of the power of the ECJ, the report continues:
	"For the first time, Member States will be able to be taken to the Court for failure to implement properly EU legislation in the area of criminal law and policing".
	In other words, even if this Parliament were to vote for a measure that reflected the will of the people of this country, this Government could be taken to court in Europe for not implementing a different measure that had been voted in by QMV in Europe. That is what we are considering.
	I am sure that the Government will say, "That is all very well, but we negotiated opt-ins". There are two problems with the opt-in, which my noble friend on the Front Bench has mentioned. The first is the matter of existing measures which we have already agreed under the previous arrangements where we will not have the choice of retaining the status quo. We will have either to agree to those measures being brought in to the new area, where the Court of Justice and QMV applies, or to opt out of those measures and bear whatever costs are imposed. Again, the report makes it clear that,
	"the Treaty does not leave open the option of retaining the status quo in respect of Title VI measures after the transitional period. At the end of the period at the latest, the UK must either accept the Commission's enforcement powers and the ECJ's jurisdiction in respect of such measures or exercise its block opt-out, again accepting that if it chooses to opt back in to any particular existing measure, the Commission's enforcement powers and the ECJ's jurisdiction will apply".
	There is a whole set of measures where we would be forced either to comply or to opt out and bear the cost. There would be many other areas where, at first blush—the Government are trying to be friendly and co-operate within Europe—we will agree to areas that are then amended. The problem is that once we have agreed to an area, any amendment that follows will be by QMV and will bring us under the jurisdiction of the ECJ. Again, I quote from the report:
	"The suggestion that the UK, having opted in to a proposal, could argue that its opt-in did not extend to fundamental amendments to the proposal during negotiations raises an interesting legal question. But the question is unlikely to arise ... In some areas of criminal law and policing, a dramatic change during negotiations may permit the UK to use the emergency brake to halt a measure's progress. In other cases, the UK may end up bound by a measure with which it does not fully agree; this is the nature of QMV".
	We are entering territory where a fundamental shift is happening in the criminal justice and legal system, which is moving from an area that is under national control of a national parliament and national Government, elected by the citizens of the country, to a territory where it can be imposed on us by qualified majority voting or parliamentary decisions in Europe, even where this nation has a different view. We should not do so without having that fully explained to the people of this country.

Lord Goodhart: We are looking at new provisions in the Lisbon treaty that will augment co-operation in civil and criminal proceedings. I recognise that the changes made in this area by the Lisbon treaty are very important and are among the most important of all the changes made by the treaty. It has to be recognised at the same time that the United Kingdom and Ireland are affected by those changes far less than other member states, because we are not bound by future changes unless we choose to opt in, and that is a very important provision indeed.
	There is much to gain from co-operation in both civil and criminal matters. For example, the recognition of foreign judgments in both civil and criminal cases is important to prevent unreasonable delays. If judgment in one country needs to be enforced in another, non-recognition in the latter of that judgment basically means that the whole issue has to be retried, which creates injustice and unnecessary expense. We need further EU legislation on a number of issues. I will give one or two examples from my experience as a member of Sub-Committee E of the EU Committee.
	We need an agreement in civil cases for a common small claims procedure without the EU so that, for example, a tourist from the United Kingdom who has booked and paid for hotel accommodation in Spain can sue the hotel for failure to honour that obligation. It is more or less impossible for that to happen now, because the costs and difficulties would far exceed the amount of money that could be recovered. We need a simple process that is the same across the EU, which minimises the language difficulties and enables someone to recover damages suffered under a small claim at minimum cost and expense.
	Another problem, which I have very much seen in action during my time as a trustee of Fair Trials International, is the absence of proper legal assistance and interpretation in criminal trials in many countries. All countries in the EU already have an obligation under Article 6 of the European Convention on Human Rights to provide legal assistance where the defendant cannot afford it, and to provide interpretation. However, this is simply not observed in many countries. Fair Trials International had great difficulty when people from this country were arrested and tried in Greece for plane spotting. That had a happy ending, largely because of the intervention of FTI. However, it showed the legal defects very clearly.
	The EU has been considering introducing laws on small claims, and on support in criminal trials, but there has been no agreement. I believe that the United Kingdom would support warmly both of these, but no agreement is likely to be reached under the Third-Pillar procedure, which needs unanimity. Some smaller countries in the EU are not willing to join up. Any agreement on the recognition of judgements would need safeguards against judgments obtained by fraud or corruption. However, limitations on recognition should be confined to those matters that are necessary to avoid injustice.
	We also need, among other things, an agreement about the proper forum for trials, to prevent conflict and abuse. Another method of co-operation that would be helpful, particularly over smaller claims, would be to limit the need for witnesses to travel to countries where trials are being held, by allowing them to give evidence by video link. In the past, this has been difficult to achieve, because it was expensive. However, IT developments in recent years are making it much more viable and it is now likely that if this was proposed by the EU, we would get qualified majority support for the video links—but, again, we would be unlikely to get unanimity.
	The problem for the United Kingdom and Ireland is that whereas we have a common law system, most other EU countries have a code-based system. However, we are protected—and this is perhaps the main justification for our protection—by our right not to be bound by new legislation unless we have opted in. However, we should not assume, without looking at it on a case by case basis, that our procedure is always better and must always be defended.
	The exchange of information and evidence by ports and the police, and by police forces of different countries, is very important when countries face cross-border and organised crime and terrorism. It should not be excluded by minor technical differences in procedure. We have agreements on procedure that have been obtained under the Third Pillar—for example, the European arrest warrant. However, the framework agreement for the EAW may need amendment in the future. Under the Third Pillar, amendments would also need unanimity. This would likely lead to existing agreements becoming out of date, and either ineffective or too restrictive.
	The noble Lord, Lord Kingsland, recognises that we have the right not to opt in. However, why should we insist, as he suggested, that new EU legislation, which will often be something that we ourselves welcome, can be blocked by the objection of, let us say, Slovakia? One small member state of the EU will be able to block what everybody else wants.
	We also need to look at Amendment No. 58, which aims to prevent Eurojust from carrying out criminal investigations. Investigation by Eurojust may well be useful in cases where internal investigation into misuse of EU money would not be pursued with enthusiasm in a particular member state. That is unlikely to be a problem in the United Kingdom, where we can be confident that this problem does not arise; but it arises in some other countries. It may well be, therefore, that the intervention of Eurojust would mean a greater likelihood that fraud against the EU—which we are all deeply concerned about—would, perhaps for the first time, be brought under control.
	There is also the question of Amendment No. 59, on the European Public Prosecutor's Office. I am somewhat sceptical about that. It is doubtful that it is desirable to set up an entirely new system of prosecutions for fraud against the EU that would operate independently of national courts. But under the Lisbon treaty the introduction of the Public Prosecutor's Office requires unanimity. It is unlikely to get that from the United Kingdom. That would of course leave the possibility of nine or more states setting up arrangements for the operation of the Public Prosecutor's Office under enhanced co-operation. I see no reason why we would wish to prevent that happening. While it may be unlikely to succeed, it could do so, and if it were to be successful that would justify a wider use of the EPPO.
	Police co-operation is extremely important for dealing with cross-border crimes. Incompatible systems for collection and storage of data make work for police much harder. We should not start with the assumption that other countries want to force on us measures that we would not want to have. If that turns out to be the case, we can always fall out on not opting in.
	Europol seems to be an organisation that has a useful role in the fight against crime and I am happy for it to be involved in investigation and operational matters. We always have the protocol to fall back on.
	I do not think that any of these amendments is necessary. All of them are likely to make the possibility of achieving effective legal action against misbehaviour in European countries harder to achieve.

Baroness Ashton of Upholland: I thought that the noble Lord, Lord Pearson of Rannoch, might want to say something about Amendment No. 55.

Lord Pearson of Rannoch: I will try to stick to my part of the deal, which was that we should finish by 11 o'clock.

Baroness Ashton of Upholland: I am very grateful to the noble Lord. Given that the noble Lord, Lord Kingsland, has grouped together two groups of amendments, I shall try to do what the noble Lord, Lord Goodhart, did and deal with these issues one by one and, perhaps, address the concerns that noble Lords have raised. I recognise the importance of the moves that have been made in the areas of justice and home affairs. I declare my interest in that I was a Minister who sat on the Justice and Home Affairs Council for just under three years and I have some experience of the opting-in process that noble Lords have referred to.
	The noble Lord, Lord Kingsland, took us on a journey through Maastricht to Amsterdam on the way that justice and home affairs have evolved. Indeed, one can look back to the beginnings in the 1970s of the Trevi group and see the moves within Europe to recognise the importance of co-operation in matters of justice and home affairs to achieve common ends—particularly on issues such as serious and organised crime. Those moves tried to make sure, as the noble Lord, Lord Goodhart, said, that in areas of civil justice, where people live, work, study, travel, buy or sell across the European Union, they have the benefit of knowing that they can rely on the EU to work together to resolve any problems that may arise.
	Put simply, if you are a tourist who buys something in a shop in any part of the European Union and it is faulty or breaks, you know you can be recompensed. Equally, it makes it easier to have debts repaid to you because of transactions that you have undertaken. These are issues that I worked on personally across the European Union in my time as a Justice Minister and I know the importance of the potential benefit to UK citizens. It is in that context that I want to talk about these matters.
	I think it is important when we look at the area of justice and home affairs, particularly in terms of judicial co-operation, that we look at what is within Article 81 of the consolidated treaties. When I was a Justice Minister I spent a huge amount of time on Article 65, trying to make sure that we considered it in the context of cross-border implications. I was very pleased to see that the treaty helpfully makes clear that measures in that field must be based on the principle of mutual recognition. From a UK perspective, that is an improvement on what went before. It is very important to me that we are recognising each other's legal systems and not seeking any form of harmonisation. That is an important principle that is much clearer within this treaty than what went before.
	As noble Lords have said, family law remains subject to unanimity and the consultation procedure with the European Parliament. There is a passerelle clause that allows family law measures to move from unanimity to qualified majority voting. It has appeared in every treaty from Amsterdam onwards but, under the Lisbon treaty, national parliaments have the right to veto its use.
	Going back to the amendments that the noble Lord, Lord Taylor of Holbeach, who is not in his place, was concerned about and that my noble friend Lord Bach discussed on recognising the importance of the role of and strengthening the control of national parliaments, here we have an example. I am not sure whether the noble Lord, Lord Kingsland, spoke to Amendment No. 55. No? I will not deal with it because I thought he was going to. I will leave it for another time.
	I will speak to Amendment No. 56, which is next on my list and deals with Article 82 in the consolidated version of the treaty on the function of the European Union. It talks about judicial co-operation in criminal matters, which is currently under Article 31 of the treaty of the European Union. Again, I think that that is an improvement on the existing treaties in a number of respects, which was implicitly acknowledged in the report of the Select Committee. It said that Article 31 was of "uncertain and controversial width" and replaced it with an exhaustive list of areas of criminal procedure where the adoption of minimum rules could be proposed. It concluded that what it described as that "clarification and definition" was,
	"unlikely to involve any significant expansion of jurisdiction".
	The new provision expressly limits activity in this area to,
	"the extent necessary to facilitate mutual recognition",
	and to police and judicial co-operation in criminal matters,
	"having a cross-border dimension".
	Again, these are important areas of clarification. It also explicitly requires that rules created under this provision should take into account the differences between the legal traditions and systems of the member states. All these requirements are welcome and I would have thought that the noble Lord, Lord Pearson of Rannoch, might welcome them as well because of the importance of mutual recognition of traditions and legal systems of individual member states.
	In moving the provisions on judicial co-operation from a system of unanimity and consultation to qualified majority voting and codecision, we have extended, as the noble Lord, Lord Kingsland, rightly said, our opt-in to apply to these provisions. That means that we choose whether we participate in them. We cannot be obliged to participate in such measures where we deem that they are not in our interests. Of course, as the noble Lord, Lord Goodhart, made clear, there will be many occasions when it is in our interests to co-operate with our European Union partners. Criminals and organised gangs do not respect borders, and therefore we need to work with our partners in pursuing cross-border prosecutions.
	The existing provisions on judicial co-operation in Article 31 of the European Union treaty provided the means to create the European arrest warrant, which is now working successfully in combating those who seek to evade justice by crossing borders. It enables the UK to bring to justice those who have fled the country. As noble Lords will know, one of those suspected of the 21 July 2005 attempted bombings in London was swiftly returned to the UK from Italy using the European arrest warrant and has subsequently been convicted.
	Amendment No. 57 relates to the inclusion of "organised crime" in the list of crimes where the EU, by qualified majority voting and codecision with the European Parliament, can establish minimum rules concerning the definition of criminal offences and sanctions. As I indicated, Article 31 of the current treaty provides for the adoption of measures establishing minimum rules. On that basis, the JHA Council has already agreed a framework decision which requires member states to have in their domestic laws offences and penalties relating to participation in a criminal organisation. That decision is wholly consistent with the Criminal Law Act 1977, which is the relevant UK legislation on conspiracy and defines "organised crime". The framework decision provides for member states to opt either for offences of participating in a criminal organisation or for offences founded on national conspiracy laws. Therefore, we are able to support the framework decision on the basis of the laws that we already have in place. It is an important element in ensuring that there are no safe havens for criminals across the European Union. Through collaboration and through the lists that we have put forward, which the committee say are a step towards an exhaustive list, the minimum and possibly the maximum rules are set out. Criminals will therefore know what will happen to them in any state in the European Union, rather than being able to evade justice. That is particularly important in the area of terrorism.
	Amendment No. 58 concerns the provisions relating to Eurojust's ability to initiate criminal investigations. The Lisbon treaty—

Lord Lamont of Lerwick: The Minister talked about mutual recognition of judicial systems but Article 83 goes much further than that. It talks about minimum rules, and rules include sanctions, which I assume means minimum sentences. Does she really believe that this is necessary? When she talks about safe havens, does she believe that for an offence such as terrorism there is a safe haven within the European Union? Most people would accept that we should respect the judicial systems of other countries. We have the arrest warrant. Do we really need to go so far as minimum sentences for these offences? Is she suggesting that countries within the European Union have penalties that are so lax that we need to alter them at a supranational level?

Baroness Ludford: Before the noble Baroness responds, perhaps I may venture to answer that. I do not know whether the noble Lord is aware that before the 2002 framework decision on terrorist offences, many EU member states did not have a specific offence of terrorism or any penalties. Presumably they dealt with such incidents under laws of murder or grievous bodily harm. It was necessary to have the ability to facilitate cross-border investigations and prosecutions, and therefore coherence and consistency were important so that every member state in the EU had offences of terrorism and incitement to terrorism. The noble Lord expresses amazement that that was the case but I am afraid that, until six years ago, it was.

Baroness Ashton of Upholland: The noble Baroness has answered the question. I hope that the noble Lord, Lord Lamont, will accept that a number of states in the European Union did not have an offence of terrorism. Although I struggle to remember the exact number, certainly many did not. It was important in the light of what happened, not only in London but, before that, in Madrid and further afield, to decide that member states needed to make sure that they had that offence covered properly. That was one example, but there are others.
	When I talk about mutual recognition, when working within the European Union I am looking to make sure that there is recognition of the system operating within a member state—particularly as we are a common law country, while many countries with whom we are working are not—so that we do not get a different legal system imported instead. Looking at cross-border questions, then, one is looking for mutual recognition linked to a system by which one can ensure that jurisdictions operate across the two.
	I shall give an example. The idea of the small claims procedure was that it operated in each member state and that procedure could be used across borders. Yet that did not affect the functioning of the individual member state; rather, the system was built on recognising that systems might be different but the outcome should be that a claim could be made to get money back that was owed across the border. That is what mutual recognition is about.
	In the context of the lists that were described in the procedure, safe havens may not be a phrase liked by the noble Lord, but is precisely to ensure that in areas where we understand what we mean by criminality—for example, in terrorism—that there is absolute clarity on what will happen within each member state, and that we work together both to bring criminals to justice and to ensure that that justice matches across member states. I do not believe that is contradictory to making sure that individual judicial systems work effectively, not least because of what I have said about mutual recognition. However, it is important to ensure—and we had this example—that if something as grave as terrorism is not recognised within member states then it should be, as part of the great co-operation that should exist between member states in the European Union.

Lord Blackwell: Most of us would accept that states should co-operate to assist each other in many areas, for example in combating terrorism or money-laundering; the Minister mentioned a number of other areas. What has not yet been justified is why those areas of co-operation—which are obviously beneficial to all those states involved—cannot continue to be achieved by intergovernmental co-operation, as they have been under the old Pillar 3 provisions?
	Why is it necessary to have EU legislation, with things introduced by qualified majority voting and a codecision of the European Parliament, as opposed to states agreeing that they want to co-operate on these sensible areas? Those matters do not start and end at the European Union borders. We have to co-operate with the United States and with other countries; why do we need to move away from the intergovernmental process in this fundamental area?

Baroness Ashton of Upholland: Well, one argument used against the intergovernmental process is the length of time that it can take to reach a decision, particularly when 27 member states are trying to find a way through an issue. Secondly, there is always a danger—and, if my memory serves me well, my right honourable friend Jack Straw mentioned this in discussion with the European Union Committee—of the lowest common denominator applying.
	I can think of circumstances on the Justice and Home Affairs Council, where I sat, where one looked for ways through particular questions but, because of one or two member states having particular issues—which I am not saying were unimportant or irrelevant, but they could none the less have been surmounted—we spent a huge amount of time trying to do that. We did not, in the end, necessarily solve the problems as effectively as we might have.
	For example, we have been looking at the recognition of people who have had driving bans. That took place many years ago but it has still not yet come into force. One question, then, in looking within an amending treaty on how to make a union of 27 member states work most effectively is whether there are better ways to do that. Now, from a UK perspective, we have clearly been sure to build into our position that we will not come into a measure on justice and home affairs unless we believe it is in our national interest. Many times, it will be; on occasion, it will not. I did not opt in to every measure. It is important that we retain that power, because we need to ensure that our national interest is always covered, but that is within the context that one's ambition is that where measures are advanced, they are for the mutual benefit of all member states, so we would want to participate as fully as possible.

Lord Lamont of Lerwick: I am grateful to the noble Baroness; she saw me looking puzzled. Reverting to my question, given that we have the European arrest warrant, which provides for near automaticity of extradition from country A to country B, and given that the European arrest warrant has abolished the requirement that an offence for which a person is being extradited had to be—at least in British law, it used to have to be—an offence in this country, and you can be extradited for an offence that is only an offence in the country to which you are being extradited, why do we need this precise harmonisation of the definition of criminal offences?
	The noble Baroness kindly answered—not entirely to my satisfaction, but she gave me a very interesting answer—my previous question. As she said, although a country does not have an offence called precisely terrorism, there are other offences: murder, grievous bodily harm and intending to harm people. Why is it necessary to have this European-wide imposition of a common definition of offence when we have an extradition procedure that provides that people would be extradited for those offences anyway?

Baroness Ashton of Upholland: If we read the exhaustive list being put forward, my perspective is that it is very important, as a European Union collaborating on judicial and police matters, to look for areas where the best proposition to put to those who would perpetrate those crimes is that within all the member states, there is a commonality of what the tariffs—the minimum standards, if you like—could be, rather than relying on X person moving to country Y, where there is not such an offence or where the tariff is much lower and having to seek, through the European arrest warrant, a solution.
	The noble Lord is right to say that the European arrest warrant is a useful and helpful tool—it has certainly been extraordinarily helpful to the UK—but I do not believe that that is the only solution. As crimes become more international in their nature and as serious and organised crime operates across borders—for example, people trafficking and drug trafficking can occur throughout the European Union, and serious crimes can operate in more than one nation state—having a commonality of the minimum tariff, and so on, can be a huge benefit.
	The advantage of the Lisbon treaty in that is that it puts that list forward more clearly. That should give some comfort and assurance to the noble Lord that this is not inexhaustive but, rather, is exhaustive and can be added to only under the procedures proposed.

Baroness Ludford: Does the noble Baroness agree that it is astonishing that when the experts are warning us that we are not getting to grips with the Mafia and serious organised crime and there is a real challenge with this, those on the Conservative Benches and in UKIP are complacent and do not want the EU to have the capacity to get to grips with those extremely serious problems? One would understand that if it were about health or education, where there are obviously issues about domestic competence, but on serious organised crime I cannot understand why there is resistance to the EU giving itself competence to grapple with those incredibly serious threats.

Lord Pearson of Rannoch: Before the Minister answers that question, can she enlighten us on how those new powers over justice and criminal procedures will deal with the problem of the European Commission itself and the enormous amounts of money that go walkabout every year under the Commission's control?
	The Court of Auditors estimated in its last report that 57 per cent of the overall budget, or €43 million, received an adverse opinion. The court said:
	"Regardless of the method of implementation applied, the Commission bears the ultimate responsibility for the legality and regularity of the transactions underlying the accounts",
	of the European Communities. I would be interested to know if this brave new world of EU legislature is going to be able to deal with that.

Baroness Ashton of Upholland: I understand the noble Lord's concern about budgetary issues, which we have already discussed twice in Committee, but I take issue with him on whether this is the appropriate moment to raise it. We are discussing issues of people trafficking, drug trafficking, terrorism and whether that should be tackled on an EU-wide basis. Issues to do with the budget, important though they are, are outwith this group of amendments and I will not respond at this point.

Lord Pearson of Rannoch: I accept what the Minister is saying, providing that we can come back to the point and reach a satisfactory answer. But in response to the points made by my noble friend Lord Lamont on the arrest warrant, would she care to take the opportunity to confirm—she has already done so in a Written Answer—that the crime of xenophobia will not be applied in this country and that people found guilty of it, or alleged to have committed it, will not be extradited under these new powers under the European arrest warrant? That would be helpful and encouraging for those of us who fear that, if we continue to speak against the European Union when it acquires legal personality and has in effect become a state, we will be committing the crime of xenophobia. If it is so ridiculous then it would be good to have her confirmation that that will never happen. I would feel somewhat more comfortable.

Baroness Ashton of Upholland: The noble Lord may be guilty of many things, but I do not think he need fear—not least because xenophobia is not on the list of crimes that have been referred to this evening—

Lord Pearson of Rannoch: Xenophobia is on the list of arrest warrant crimes, and it is not a crime in the United Kingdom.

Baroness Ashton of Upholland: The noble Lord has an amendment much later on in our deliberations and I do not want to pre-empt what will no doubt be an interesting discussion in which other noble Lords may wish to participate. I have had enough problems with collapsed groups of amendments for one night and would like to try to get through this. I am not worried about the noble Lord being arrested. He is quite safe. He might be worried but he worries needlessly, not least because he is sitting in your Lordships' House. He is perfectly entitled to make his views known and he does so with great gusto, even if he did refer to himself earlier as the fluffy end of the lollipop.
	Amendment No. 58 is about the role of Eurojust and its ability to initiate criminal investigations. As noble Lords said—and I think the noble Lord, Lord Kingsland, referred to this—the Lisbon treaty creates a new legal base for Eurojust, building on that which is already in Article 31. It provides an extension of the mandate by envisaging that it could be provided with the power to initiate criminal investigations where at the moment it can only request such action from a member state. Paragraph 2 is clear—and this is important for our discussions—that such formal acts of judicial procedure shall none the less be carried out only by competent national officials.
	Although the legal base for Eurojust provides for the possibility for extending the remit, it is clear that the UK could not be bound by such a proposal unless we specifically opted in. It would require a new legislative proposal and our extended opt-in would apply to this provision as to the rest of the chapter. So we would have the right to choose whether we participated in any measures to amend or replace the Eurojust council decision and would do so only if it was in our national interests. I should make it clear, in the spirit of being extremely positive about what works well in Europe, that working with Eurojust has been beneficial to the UK. Since 2002, it has given considerable assistance to the UK and has been central to combating drug and human trafficking, serious fraud, money-laundering and child pornography in Europe. I hope that the noble Lord will feel that I have answered his question well.
	Amendment No. 59 is the next amendment in this sequence of amendments and concerns the provisions on the creation of a European Public Prosecutor. Article 86 of the Treaty on the Functioning of the European Union includes provisions for the creation of a public prosecutor who would investigate, prosecute and bring to judgment the perpetrators of and accomplices in offences against the financial interests of the Union. We have a double lock on any move to create a public prosecutor. In lock 1, the opt-in applies and we choose whether to participate. As the noble Lord, Lord Goodhart, said, it is very unlikely that we would wish to opt into a proposal to create a public prosecutor. In lock 2, unanimity is retained for any decision to establish such a prosecutor and for any decision to extend the prosecutor's powers. In the unlikely event that we opted into a proposal to establish one, we would have a veto over any decision to extend those powers. In no circumstances can we be obliged to participate in the creation of such a public prosecutor but, as noble Lords have said, if nine of the member states wish to proceed under enhanced co-operation, they are free to do so. That does not affect the UK unless we decide to participate.
	Amendment No. 59A relates to the provisions on the collection, storage, processing, analysis and exchange of relevant information in relation to the prevention, detection and investigation of criminal offences. The new article sets out the legal base for police co-operation measures. Such measures, as the noble Lord, Lord Goodhart, said, are subject to QMV and codecision. This includes the provision for the collection, storage, analysis and exchange of relevant information. We believe that the exchange of information throughout the European Union is vital; it enables us to work together to tackle common threats such as terrorism and organised crime so that we can pursue and prosecute criminals more effectively. This co-operation has given us access to crucial data-sharing arrangements, such as introducing a mechanism that allows the police to access fingerprints, DNA and vehicle registration information held by other member states. Noble Lords will probably be aware that there was a pilot project with the German police, who accessed data from Austrian police and are now investigating new leads on more than 1,500 unsolved crimes, including serious offences such as rape, murder and sexual offences. We hope to see the benefit to UK investigations and we want to pursue this. The amendment—I am not suggesting that this is its purpose—would deny us the benefit of this valuable co-operation.
	Amendment No. 60 concerns the provisions relating to Europol and Amendment No. 61 relates to the provisions on Europol's operational functions. Under the new article, Europol's mission is,
	"to support and strengthen action by the Member States' police authorities and other law enforcement authorities in preventing and combating serious crime affecting two or more Member States, terrorism and other forms of crime".
	Again, these are very important issues. Europol was created under the Maastricht treaty and formally set up by an EU convention in 1998. That convention is due to be replaced this year with a Council decision.
	It is in our interests to co-operate with Europol. Noble Lords will know only too well of the potential, and indeed the reality, of the work that Europol has done to break up violent and armed gangs of eastern European robbers who had already committed more than 20 attacks in the UK, to break up child pornography networks and to support the Midlands police force in breaking up a people-trafficking ring that involved Chinese and Iraqi people. Europol is very important. Perhaps its most important investigation involved the Cambridgeshire letter bomber. It gave direct support to the Cambridgeshire police, which led to the apprehension of an individual who was convicted of sending explosive devices through the post. When he was arrested, he was found to be in possession of a number of explosive devices that were ready to be posted. There are direct benefits to the UK in collaborating with Europol.
	The noble Lord, Lord Kingsland, said a little about Amendment No. 94. We will come to this amendment much later on, so I do not want to go into too much detail, although I will say that it is about "financial penalty". The UK cannot be fined for deciding that it does not wish to opt in or opt out of something. We will discuss that in greater detail. When we come to look at the provision, it will be important to see that this is not about a financial penalty, but about a recognition that, if as a consequence of the UK's action it becomes inoperable, then it is only reasonable that it may be required to contribute financially to make sure that the consequences of that inoperability are dealt with. I have dealt with that as much as I can. I shall write to the noble Lord, Lord Pearson, on xenophobia, rather than go back into that right now. I hope the noble Lord, Lord Kingsland, will feel able to withdraw his amendment.

Lord Kingsland: I should like to thank my noble friend Lord Blackwell, the noble Lord, Lord Goodhart, and, of course, the noble Baroness, for their substantial contributions to this important debate. I am not convinced—even after listening to the noble Baroness—that the changes in this treaty are necessary.
	The objects that the noble Baroness has said that those changes are intended to achieve can be equally well achieved by a combination of the arrest warrant and intergovernmental co-operation. I have heard nothing from the government Bench this evening to change my mind. Indeed, in many respects, informal co-operation between member states in tackling so many of the problems mentioned tonight is probably just as effective as any formal agreement between member states. One should recognise that, just as constitutional conventions in this country play such a crucial part in the successful way we operate governmental affairs, so, equally, conventions between member states can have the same effect internationally.
	The noble Lord, Lord Goodhart, admitted that these changes were important but, rightly, went on to say that the United Kingdom need not be affected by them because it has the opt-out provision. There are, as I tried to indicate in my opening remarks, frailties in the opt-out provisions. However, generally speaking, I accept what he said; but that is not the point of our amendments. They were about what those measures are doing to the European Union itself. In our submission, these measures are changing the character of the European Union in a way that will prove extremely undesirable.
	It is often said that the threat we are faced with is that the European Union will become some form of executive Government. Some describe it as a state. Originally, under the treaty of Rome, that conclusion would have been difficult to draw from the initial measures. One could say, perhaps, that the Community was federal in that it had a court that could override the decisions of national courts; but one could not say that it had a Government in the sense that national states have.
	However, these measures are an undesirable step towards executive centralisation that will prove extremely damaging to the European Union. They will not only affect, adversely, the attitude of citizens to it, but will also undermine all those good things that it has done. I will give you an example. One of the most ingenuous instruments the Community has developed over the years is the directive. It has been fundamental to the success of establishing a single market—its ingenuity lying in the fact that all the implementation is within the power and the legal systems of the member states.
	For example, as I indicated in my opening remarks, under Article 83.2 the Union will take on the power with respect to any harmonisation measures to introduce its own criminal law system and to implement it from the centre. This is the destruction of the concept of the directive. It will make member states, in future, extremely reluctant to enter into fresh areas of harmonisation knowing that the directive will be undermined by the Union's ability to impose rules from the centre. These measures will have a damaging effect on the European Union that goes far wider than what they say in themselves.

Lord Wallace of Saltaire: I have been following the noble Lord's argument with interest, but where does he draw the line? Are the Conservatives saying that they now accept the European arrest warrant—they certainly resisted it some time ago—the existence of Eurojust and the existence of Europol, or are those over the line and should we now draw back? It is important to know just how far we are going. I have heard senior members of the CPS say how useful Eurojust is—I am sure that the noble Lord, Lord Kingsland, has heard the same—but do these measures take us beyond the old line, which we have to hold, or do the Conservatives say, "Thus far, but no further than where we have got to after that"?

Lord Thomas of Gresford: Before the noble Lord answers that question, perhaps I may ask him about the criminal justice system that he is suggesting will be imposed on this country. What criminal justice system? What is the mechanism by which this imposition is to take place?

Lord Kingsland: I am not suggesting that it is going to be imposed on this country, because we have the benefit of the opt-out.

Lord Thomas of Gresford: Then why are we objecting? What is the noble Lord's objection if it cannot be imposed in this country?

Lord Kingsland: I find that an uncharacteristically astonishing observation from the noble Lord, Lord Thomas. I have tried to make it clear in my winding-up speech that my concern was not primarily our opt-out but what these measures would do to the character of the European Union in general. We want the European Union to be a success. These measures will contribute substantially to the European Union not being a success. That is what lay behind my observations.

Lord Thomas of Gresford: Perhaps I may repeat my question: what criminal justice system can be imposed on any country, and by what mechanism?

Lord Kingsland: The mechanisms are set out in Article 83. They are there for the noble Lord, Lord Thomas, to read in relation to evidence, the rights of victims and the individual liberties of the citizen. All these aspects will now be legislated on by the European Union under the first pillar system. That will dramatically change the justice system in the European Union member states. That is absolutely plain from the text of the treaty.
	I am now trying to remember the questions put to me by the noble Lord, Lord Wallace of Saltaire. As far as Europol is concerned, the noble Lord, Lord Goodhart, said that he had reservations about the EPP. I cannot remember exactly whether he extended those reservations to Eurojust, but he certainly said that he had reservations about the EPP.

Lord Goodhart: I do; I said that I had reservations about the European Public Prosecutor's Office. But I welcome both Eurojust and Europol.

Lord Kingsland: It is common knowledge that we have hesitations about both organisations. If they were established by voluntary agreement or intergovernmental agreement, it would be a different matter. But we certainly have deep antipathy to the proposals that are made about them in the Lisbon treaty.
	As far as the arrest warrant is concerned, we opposed many aspects of it, principally because it was not possible, under the provisions, for individuals to use the defence of the European Convention on Human Rights. We continue to have those hesitations.

Lord Goodhart: There is clearly written into the Extradition Act, which gives effect to the European arrest warrant, a defence of human rights.

Lord Kingsland: That is most interesting to hear from the noble Lord, Lord Goodhart. My understanding is that it is not possible under the European arrest warrant, once all the formal stipulations are complied with under the provisions that set it up, to raise convention rights. That is my understanding.
	The issue for us is that these measures will change the character of the European Union in an undesirable way and make it less likely to be the successful organisation that it was in its earlier years. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 54 had been withdrawn from the Marshalled List.]
	[Amendments Nos. 55 to 64 not moved.]
	[Amendments Nos. 65 to 69 had been withdrawn from the Marshalled List.]

Baroness Royall of Blaisdon: Before moving to resume the House, may I respectfully point out that we have two more days in Committee on this Bill. I therefore urge all noble Members present, and those who may be present on futures days of Committee, that it is best not to enter into extraneous arguments; we should focus on the amendments in question and not repeat arguments already made in Committee. With that, I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.
	House resumed.
	House adjourned at 11.17 pm.